HOUSEHOLD FINANCES Take

Take control of YOUR DEBT

Editor of TheMoneyEdit.com Kalpana Fitzpatrick shares her financial wisdom on how to combat increasing debt

The rising cost of living has taken a grip recently, and many households are now feeling the pinch as energy prices, fuel, food and other everyday essential costs go up. One in three people* admit that they are struggling with essential bills and credit payments. If you are worried about falling into debt, there are some things you can do to tackle it. What do you owe?

List all your debt and work out how much it is costing you by looking at the annual percentage rate (APR).

Aim to shift the debt with the highest APR as fast as possible, as this is costing you the most. But be sure to make minimum payments on all your other debts first, including priority debts which should never be ignored. These include: mortgage/rent payments, secured loan arrears, utility bills, council tax, TV licence, tax payments, hire purchase agreements, child maintenance, missed payments owed to the government, and court fines.

Shift to 0%

If you have credit card debt and are paying interest, then shifting it to a credit card that offers a 0% balance transfer could save you hundreds of pounds.

Some providers offer as much as 34 months’ interest free, meaning you can chip away at your balance without extra costs. There is a transfer fee, so do the maths first. (There are fee-free ones, but you’ll have fewer months to calculator at stepchange.org/ debt-info/debt-consolidationcalculator.aspx to see if it is right for you. You should also get financial advice first.

pay off the balance). Use an eligibility checker to make sure you are accepted – the best 0% deal will require a good credit score. Take a break

If all you need is some breathing space to get back on your feet, then you may be able to use the government’s break in payments scheme, which lets you temporarily stop payments for 60 days without facing charges.

To be eligible, you must live in England or Wales (in Scotland it’s the moratorium period) and have at least one qualifying debt, such as a credit card, rent, overdraft, utility bills, mortgage or tax payments. Apply via a debt charity such as StepChange (stepchange.org) or the National Debtline (nationaldebtline.org).

But remember, this is only a break in payments – you will have to make up for the payments once it ends. Consolidate debt

If you have multiple debts, such as credit cards, buy now/pay later or personal loans, then you could bring them all together into one pot with a debt consolidation loan. But remember, this is not right for everyone; make sure that you can afford the monthly repayments and that you are reducing your costs. If you have a low credit score and a lot of debt, then again it may not be your best option. Use the StepChange

Ask for

ADVICE

Use the Turn2Us calculator (benefits-calculator.turn2us. org.uk) to make sure you don’t miss out on any benefits.

If your circumstances have changed, see if you can get a council tax reduction at gov.uk/apply-council-taxreduction.

Get help with budgeting at moneyhelper.org.uk/en/ everyday-money/budgeting.