The benefits shake-up is leaving people so stressed and unable to cope that mental health care providers cannot keep up with demand.
Cuts to local services and a lack of housing were also making life more difficult for people, whose wellbeing would suffer as a result, causing soaring cases of poor mental health.
The research showed that demand for services is outstripping supply, and concluded that planned funding increases “fall far short” of what is needed to bring mental health services up to the same quality as physical health care.
In the report, researchers described “deep disquiet” among NHS mental health trust leaders about a concerning care deficit – agreeing that growing poverty in communities across the country was to blame.
Experts added that loneliness and homelessness are also contributing to a rise in the number of people suffering from mental illnesses like depression and anxiety.
In total, more than 92,000 people have sold The Big Issue since 1991 to help themselves work their way out of poverty – more than could fit into Wembley Stadium.
More than nine out of ten (92 per cent) of the NHS mental health leaders who took part (nearly 60 per cent of all trusts) said changes to the benefits system were increasing demand for mental health services in their area. As many as 98 per cent blamed financial hardship in particular.
Saffron Cordery, deputy chief executive of NHS Providers, emphasised that more people seeking treatment for mental illness is a good thing, describing the “great strides” made in promoting equality between mental and physical health.
But, he said, there is more to do – the NHS must be realistic and transparent about what services they can provide, when people can access the care they need and whether the services are doing enough to meet demand.
Cordery added: “Mental health leaders are clear that social and economic pressures are translating into higher demand for services.
“Coupled with staff shortages and concerns that funding earmarked for mental health is not reaching the frontline, providers are worried about their ability to maintain the quality of services they can provide.
“The NHS long term plan sets out a welcome vision for mental health services, but we need to see greater realism about the demand challenge mental health services face. We need to see urgent action to address the care deficit identified by the sector.”
The deputy chief executive said measures must be taken to lock in funding for the sector and accelerate recruitment for the specialist staff needed.