The cost of living is pushing more of us into debt. Avoiding it is best but once we’re in debt, what can we do?
Debt can feel overwhelming, but it’s more common than you might think. The cost of living means many of us are borrowing just to get by.
The good news is, there are clear steps we can take to stop things getting worse and to start putting things right. Knowing where to turn (and acting early!) makes all the difference.
Do
- Get help early. We should find help as soon as we realise we can’t make ends meet. We can contact free advice charities like StepChange, National Debtline or Citizens Advice (find contact information below). Avoid private debt companies that charge as it just adds to the problem.
- Write out a budget plan regularly. Every few months, or whenever our situation changes, like a new job, benefits, or an unexpected expense, check where our money’s going. Try the Quids in! free Budget Planner to see what’s coming in and what’s going out.
- Pay what we can afford. If we have debts, but a bit of money left over each week, we should pay off as much as we can afford without over-committing ourselves. Be realistic. If we commit to payment levels and can’t keep up with them, we will struggle to reach a new deal with lenders.
- Understand how interest works. It’s the charge placed on top of what we borrow. As it’s a percentage, the more we borrow, the more it costs us. And, of course, the higher the percentage, the more that costs us too.
- Pay off debts with high interest first. If we can, we should find credit (also know as debt) with cheaper interest and move our debt around, working towards paying it off. It can take a while but this is all about taking control.
Don’t
- Borrow from unlicensed lenders, even if it’s someone we know. They offer ready cash and there’s no paperwork, but that means they can ask us to pay whatever they like in future. They are loan sharks (more here). If you get caught in this trap, contact the Illegal Money Lending Team.
- Ignore the problem. We mustn’t stick our head in the sand. Face up to debt, however small, and take action. There is free help available and if we owe too much to even make the minimum payments each month, we need to find help fast. People find they start to feel better with someone on their side who may be able to speak to lenders and even handle their payments for them.
- Avoid talking to lenders. We should do this as soon as we know we’re struggling. Creditors (who we owe money to) want to get their money back, however long it takes, and it’s in their interests to strike a deal.
- Borrow for things we don’t absolutely need. It’s tempting to use credit for day-to-day costs, but high interest can make things worse fast. Only borrow if you’re sure you can repay it on time and in full.
Breathing Space
The government’s Debt Respite Scheme – known as ‘Breathing Space’ – is available to people in England and Wales who are struggling with problem debt. The scheme provides legal protections so that we cannot be contacted by companies we owe money to, for a certain length of time. In this time we should seek debt advice. It’s also available to people receiving mental health treatment.
To apply for Breathing Space, contact the local Citizens Advice office, a national debt charity like StepChange or National Debtline, or the local authority (see the list below for contact details). Money Helper’s tool helps us to find a free debt adviser nearby.
Contact details
Wherever you live in the UK, there’s free, confidential advice available. Talking to a trusted service can help you make a plan, stop extra charges, and deal with creditors on your behalf.
National
National Debtline
📞 0808 808 4000 (Freephone)
🌐 www.nationaldebtline.co.uk/
Free, confidential advice by phone or online chat. Also offers a self-help tool called My Money Steps.
StepChange Debt Charity
📞 0800 138 1111 (Freephone)
🌐 www.stepchange.org
Free debt advice and practical help with payment plans.
England and Wales
Citizens Advice
📞 0800 144 8848 (England)
🌐 www.citizensadvice.org.uk
Local offices and online advice for help with debts, benefits, and money issues.
Advicelink Cymru (Citizens Advice Wales)
📞 0800 702 2020 (Freephone)
🌐 advicelinkcymru.org.uk
Free, bilingual (English and Welsh) advice service for people in Wales. Funded by the Welsh Government and part of the Citizens Advice network.
Civil Legal Advice (CLA)
📞 0345 345 4 345
🌐 www.gov.uk/civil-legal-advice
Free legal advice for people on low incomes, including help with repossession or court action.
Scotland
Citizens Advice Scotland
📞 0800 028 1456 (Freephone)
🌐 citizensadvice.org.uk/scotland
Free, impartial advice on debt and money issues across Scotland.
Debt Arrangement Scheme (DAS)
🌐 mygov.scot/debt-arrangement-scheme
Government scheme that freezes interest and gives you more time to repay your debts through a Debt Payment Programme.
Advice Direct Scotland
📞 0808 800 9060
🌐 advice.scot
Free debt and consumer advice for anyone in Scotland.
Northern Ireland
Advice NI
📞 0800 915 4604
🌐 adviceni.net/money-debt
Free debt advice and budgeting help for people across Northern Ireland.
If you’re in danger from a loan shark
Call the Illegal Money Lending Team on 0300 555 2222
or report it anonymously at stoploansharks.co.uk
