Bill prioritiser: get help with your bills

If you’re struggling to pay your rent, the first thing to do is speak to your landlord, council or housing association.

It’s understandable you might be afraid of explaining that you’re going to be late with the rent. But it’s far better to get the issue out in the open before you actually fail to pay up.

When you speak to your landlord explain why you’re going to be late with the rent and try to agree a plan to pay what you owe in instalments.

If you expect the situation to continue and you’ll struggle to pay, talk to a free debt adviser. You don’t have to deal with this on your own. There are lots of ways to deal with debt, even if you think you have no spare money to pay back what you owe. A free debt adviser can help you work out the best solution for you.

If your circumstances have changed and your income has fallen, you might be able to claim benefits to help you pay your rent, such as the housing element of Universal Credit. You can use our Benefits Calculator to quickly find out what you're entitled to claim.

Your Universal Credit payment might not cover all your housing costs. This is more likely if you’re living in private rented housing.

If so, you might be able to claim a Discretionary Housing Payment (DHP) from your local council to cover the shortfall in rent. You can only claim a DHP after you've received your first Universal Credit payment. You might also be able to claim DHP if you’re claiming Housing Benefit or you've been on Universal Credit for awhile.

Make sure you get housing advice as soon as you possibly can. If you’re being threatened with eviction as a result of rent arrears, follow the links below to check your options and rights.

Read about eviction and your rights: 

If you live in England, visit ShelterOpens in a new window

If you live in Scotland, visit Shelter ScotlandOpens in a new window

If you live in Wales, visit Shelter CymruOpens in a new window

If you live in Northern Ireland, visit nidirectOpens in a new window

Lenders have to treat you fairly and consider any request you make to change the way you pay your mortgage.

Offer to pay back what you can afford when you discuss your options with your lender – continuing to pay back some money is better than paying nothing and will help reduce your arrears.

Consider how and when you can return to making your full monthly payments. Think about when you can afford to pay more to make payments higher than your normal monthly payment to pay down any arrears.

Depending on your circumstances, your lender might also make suggestions for you, for example, extending your mortgage term.

Don’t delay – it’s important to get in touch with your lender as soon as possible.

It’s a good idea to look at your budget again to see if there are any ways to free up money to meet your mortgage payments.

Our section Living on a squeezed income can help you budget and maximise your income.

Mortgage payment protection insurance, also called accident, sickness and unemployment insurance, can help with your mortgage repayments if your income has fallen because of redundancy, accident or sickness.

You might have taken it out when you got your mortgage. Look through your mortgage paperwork and double check with your lender or the broker you used when you took out the mortgage.

Contact your provider as soon as you can if you’re worried about paying your energy bills. Your supplier must work with you to agree on a payment plan you can afford. This includes reviewing a plan you have agreed before.

You can ask for:

• a review of your payments and debt repayments
• payment breaks or reductions
• more time to pay 
• access to hardship funds
• grants and schemes they run and offer.

Priority Service registration is a scheme run by energy suppliers. It offers a free support service if you're in a vulnerable situation or if there are vulnerable people in your household. Contact your energy supplier or network operator to join the scheme.

If you use a prepay meter and can’t top up, you can ask for ‘emergency credit’. Your supplier's contact details are on the back of your bill or on their website.

If you don’t feel like phoning, use email or webchat to respond in your own time.

The Ofgem price cap is now £1,834 a year, and this will change to £1,928 a year on 1 January 2024.

This is based on a household with typical usage. You could pay more or less than this, depending on how much energy you use. The £1,834 price cap will last until the end of December 2023. 

To find out more, including how to get on the Priority Service register, see our guide Help if you’re struggling to pay your bills.

The cost per unit for gas and electricity are much higher than they’ve been in the past. If you think you’re going to struggle to keep up with higher monthly payments, get in touch with your supplier for help. 

Energy suppliers are starting to offer fixed rate deals to new and existing customers. To help you decide if switching to a fixed tariff is a good idea, read our blog Should I fix my energy bill?

You might qualify for the:

Warm Home Discount

You could get £150 off your electricity bill under the Warm Home Discount scheme. To qualify for the discount, you must either get Pension Credit or be on a low income and receive certain means-tested benefits. You can still qualify for the discount if you use a pre-pay or pay-as-you-go electricity meter. The discount isn’t available in Northern Ireland. For most, the Warm Home Discount is automatically applied to your bills in the autumn each year.

If you qualify and live in a park home or live in Scotland and qualify because of a low income, you will need to apply for the discount, more details are available at GOV.UKOpens in a new window

To find out whether you qualify, you can call the government Warm Home Discount phone line on 0800 731 0214 between 14 November 2023 and 31 March 2024. There’s also more information at GOV.UKOpens in a new window

Winter Fuel Payment

If you were born on or before 26 September 1955 you could get between £100 and £300 to help you pay your heating bills. You will also get an extra £300 on top of your annual payment. This should be paid to you automatically. You don’t need to claim it.

If you’re not already claiming Pension Credit, you can find out if you qualify at GOV.UKOpens in a new window

Find out how to claim the Winter Fuel Payment at GOV.UKOpens in a new window

If you live in Northern Ireland and want to claim Winter Fuel PaymentOpens in a new window visit the nidirect website.

Cold Weather Payment

You may get a Cold Weather Payment if you’re getting certain benefits or Support for Mortgage Interest. You’ll get a payment if the average temperature in your area is recorded as, or forecast to be, zero degrees Celsius or below over seven consecutive days. You’ll get £25 for each seven-day period of very cold weather between 1 November and 31 March.

Check if you can get a cold weather payment in your area at GOV.UKOpens in a new window

If you live in Northern Ireland, find out if you’re eligible for Cold Weather PaymentOpens in a new window and how to claim on the nidirect website.

Support if you’re on a pre-payment meter

Some foodbanks give out voucher top-ups to help pay top up your pre-payment meter You’ll need to be referred to a food bank first. You can also get referrals to foodbanks through your local council and other organisations including local advice centres, your GP or support workers.

Scotland Child Winter Heating Assistance

For 2022/23, Child Winter Heating Assistance is a £214.10 annual payment to help disabled children and young peopleOpens in a new window under 19 years old and their families living in Scotland. If there is more than one child or young person who qualifies in the household, they each get a payment. 

Northern Ireland

All households in Northern Ireland will receive a one-off payment of £600 to help with their energy bills, with payments starting in mid-January 2023. The support will combine £400 worth of support from the Energy Bills Support Scheme Northern Ireland (EBSS NI) and £200 under the Alternative Fuel Payment (AFP) scheme for using off-grid fuel like LPG or heating oil.

Find out more on our page about off grid fuels  

Disabled Facilities Grants

Find out how to claim a Disabled Facilities GrantOpens in a new window at GOV.UK.

In Northern Ireland, find out more about Disabled Facilities GrantsOpens in a new window on the nidirect website.

You might be able to get extra support if you’re vulnerable. For example, if you:

• have a disability or long-term health condition
• have mental health needs
• have hearing or sight loss
• are pregnant or have children under the age of five
• are recovering from an injury or just released from hospital
• don't speak or read English well or have other communication needs
• have reached State Pension age. 

Ask your supplier to sign you up to their Priority Services Register for extra help with supply and bills. You can find out more about the Priority Services RegisterOpens in a new window and what support you could get on the Ofgem website.

Use the Citizens Advice Extra Help Unit. They can help with bill disputes or other problems paying your bill.

If you live in England or Wales

Call the Citizens Advice consumer helpline free on 0808 223 1133, Monday to Friday 9am to 5pm

To contact a Welsh-speaking adviser call: 0808 223 1144

If you have hearing loss, you can use Relay UK to call the consumer helpline using an app or textphone. Find out how to use Relay UK on the websiteOpens in a new window

If you live in Wales

The Discretionary Assistance Fund is a grant to help pay for essential costs such as gas and electricity if you:

• are experiencing extreme financial hardship
• have lost your job
• have applied for benefits and are waiting for your first payment.

You can apply for the  Discretionary Assistance Fund on the Welsh Government websiteOpens in a new window

If you live in Scotland

You can use Advice Direct Scotland’s service at energyadvice.scotOpens in a new window or call them free on 0808 196 8660

If you live in Northern Ireland

If you have a vulnerability, the Northern Ireland Electricity Networks can support and make sure you get the help you needOpens in a new window

You can also find out more information about energyOpens in a new window on the NI Housing Executive website.

If you’re using the Child Maintenance Service (CMS) and stop making payments without telling them why, they'll add on fees and charges to the amount you owe. If you pay directly to your ex and stop paying, they can contact the CMS and ask for the money to be collected so you must take action.

First, talk to the other parent and try to reach a compromise. This is the quickest and simplest way to reach an agreement. Good communication and empathy are important, as well as being honest about your financial situation.

Ask if you can reduce child maintenance payments for now. Then plan to return to the normal, higher amount when your income returns to normal.

If you can’t come to an arrangement, and your income has dropped by at least 25%, contact the Child Maintenance Service, to make them aware.

If your income has fallen by 25% or more, or you’ve lost your job, ask the CMS to calculate what you should be paying. The CMS charge a fee for this service.

If your income hasn’t dropped by that amount – you'll have to carry on paying the full amount.

The CMS will make its assessment based on the paying parent’s gross annual income.

If you’re worried about keeping up with your TV Licence payments, contact TV Licensing as soon as possible to talk about what to do next.

They offer many ways to pay for your licence so it’s worth speaking to them to check which scheme is right for you. For example, their monthly and quarterly Direct Debit schemes can help spread the cost of your licence.

Beware, it’s illegal to watch television without a TV Licence, so it’s best to get in touch if you’re struggling.

It's worth checking if you qualify for a reduced rate on your TV Licence, for example, if you're over 75 or registered blind.

If you don’t think you’ll be able to afford a TV Licence soon, it’s best to cancel it and potentially get some money back.

To cancel your TV Licence, make sure you have your customer number handy and choose the option to cancel your licence.

Call TV Licensing on:

• 0300 790 6068 – if you pay by Direct Debit or all in one go
• 0300 555 0300 – if you pay by TV Licensing payment card.

Or you can cancel online by using the contact form on the TV Licensing website.

You can apply online for a refund up to two years after the expiry date of your licence. You might have to print the form and provide evidence. Refund amounts are calculated using information such as when the licence was issued, its expiry date and when you can show you don't need it from.

If your circumstances change and you can no longer afford your fine, it’s always best to try to get the court order changed rather than falling behind with the payments.

You mustn’t ignore a court fine. If you do, the people you owe money to can apply to the court to: 

• have the payments taken out of your wages or benefits
• instruct bailiffs to come and collect what you owe (if you don’t respond at all)
• register the fine so it will appear on your credit record for five years.

If you can’t afford to keep up the payments ordered by the court, you can ask to change the terms of the order to fit in with what you can afford to pay. This is called an application to vary the order.

Depending on your financial situation, you can:

• pay off the debt in smaller instalments, or
• say you can no longer pay anything at all, if you can show you’ve lost your job.

You’ll have to give details of your financial situation when you make the application. Contact the fines officer at the court and ask them if there is any help available. Their details will be on any letters you have.

Sometimes you might be asked to attend a court hearing to decide what to do.

Make sure you attend because if you don’t, the court might decide to increase the fine in your absence or instruct bailiffs to come and collect the money you owe. 

Contact HMRC as soon as possible to ask for help if you:

• have missed a tax deadline
• know you will not be able to pay a tax bill on time.

Payment Support Service

Telephone: 0300 200 3835

(Monday to Friday, 8am-4pm)

If you’re self employed or a business and need help and support with outstanding tax payments, call the HMRC helpline on: 0800 024 1222.

Before you call, they might ask you some security questions. Make sure your personal details and address are up to date in your personal tax account. If you don’t already have a personal tax account, you can set one up.

You’ll need to suggest how much you can afford and over what length of time you can make the repayments.

To come up with this, make sure you:

• work out how much you have coming in and note down any risks to your income in future
• make a budget – making sure you can cover any living costs and other priority debts
• come up with an amount that you’d be comfortable paying back every month
• using that monthly figure, work out how long it would take to pay off
• have details of other repayments or debts you currently owe and whether you have savings.

If HMRC don’t agree to your repayment plan ideas, they’ll use the information to come up with another repayment arrangement.

If you’re on a low income, visit for TaxAid websiteOpens in a new window for help. If you’re over 60 and on a low income, Tax Help for Older PeopleOpens in a new window offer help and advice. 

You can make your own Time to Pay arrangement using your Government Gateway account, if you:

• have filed your latest tax return
• owe less than £30,000
• are within 60 days of the payment deadline
• plan to pay your debt off within the next 12 months or less
• if you can't make your own Time to Pay arrangement online.

Call the Self Assessment helpline if you can't make your own Time to Pay Arrangement online, for example you owe more than £30,000 or need longer to pay.

Self Assessment Payment Helpline

Telephone: 0300 200 3822

Monday to Friday, 8am to 4pm

If you’re paying back overpayments of tax credits and you don’t have enough money left to meet essential living costs or have other debts and repayments to make, you can ask for the amount you're paying back to be reduced and spread over a longer repayment period.

If you’re still on tax credits or your tax credit claim has ended and you’re not claiming Universal Credit, you’ll need to contact HMRC.

If you’re now getting Universal Credit, you’ll need to contact DWP. 

You can tell HMRC if you think a decision about your tax credits is wrong and should be changed. Asking them to look at your claim again is called a ‘mandatory reconsideration’.

You can ask for a mandatory reconsideration if:

• you’ve been refused tax credits 
• you think you’ve been paid the wrong amount 
• your tax credits have stopped
• HMRC thinks you’ve been overpaid when you haven’t
• your claim has been backdated to the wrong date. 

For tax credits, you should ask for a reconsideration within 30 days of the date of the decision.

If you're having to repay the DWP for loans and advances including advance payments, budgeting advances, or hardship payments and you don’t have enough money left to meet essential living costs you can ask for payments to be reduced.

Act quickly because DWP can apply to have the money taken out of your wages if you're working, and they could pass the debt onto a debt collection agency.

If you get in touch, you might get repayments paused for three months if it's a new claim or one month if it's a change of circumstances. Log into your online account and add a note to your journal asking for your repayments to be reduced or call the Debt Management contact centre.

If you’ve been told about a new overpayment that you don’t agree with, you might be able to ask for the decision to be looked at again.

This is called asking for a ‘mandatory reconsideration’. You usually have to ask for mandatory reconsideration and get a decision before you can appeal.

For most benefits, it’s important to ask for reconsideration one month from the date the original decision was sent to you.

Your student loans are repaid automatically through the tax system. Deductions should stop once you’ve paid them off. If they don’t stop, it’s important that you ask for a refund.

Unlike other debts, you don’t have to make repayments if your income drops, so you shouldn’t prioritise paying your student loan over your overdraft or credit cards.

If you earn below the minimum earnings thresholdOpens in a new window a week or something unexpected happens such as losing your job, your student loan repayments will stop automatically until your income reaches the threshold again.

If you’re self-employed, you'll need to declare your student loan once a year on your tax return, so your repayments will be based on your total income.

Remember, student loans do not go on credit files. For example, if you’re getting a big loan such as mortgage, lenders will ask if you have one so they can take the debt into account but it shouldn’t prevent you from being able to get a mortgage.

Interest will be charged on the outstanding debt, but you only have to make repayments once you begin earning enough.

Allocate some of your income to start reducing high-interest debts from student credit cards, bank loans and your overdraft.

On any other debts like credit cards or Buy Now, Pay Later, make at least the minimum repayments and make sure you don’t miss any instalments. If you do, it might hurt your credit rating and ability to borrow for a home or car in future.

Although your overdraft was likely to have been fee free while you were studying, this interest-free period will come to an end. It’s a good idea to pay it off as soon as you can to avoid big interest payments later.

This is because standard current account overdraft interest is often as high as 40%, which is a significantly higher than a typical rate for a personal loan.

They might let you extend the agreement or repay the arrears over a certain period of time.

Firms must help customers who are struggling financially, including those who have taken a big income hit.

HP agreements come under the Consumer Credit Act, which gives you certain rights when dealing with creditors. For example, if you fall into arrears they must:

• give you time to bring your account up to date before they take any more action
• send you regular statements and arrears letters if you fall behind.

If you’ve paid for less than a third of the amount owed, the company can take the item back. If you’ve paid more than a third, they need to take court action to get the goods back, or to make you pay.

If you miss payments, your creditor can send you a default notice. This is likely to affect your credit rating. They usually do this when they think the agreement has been broken and they don’t expect you to restart your payments.

Contacting creditors as soon as you can will reduce the chances of them taking this action.

If you agree not to continue the agreement you can write to your provider to end it at any time.

If on the date you terminate the agreement you’ve paid:

• half the amount payable – your contract there should be no further instalments.

• more than half the amount – you can’t get a refund buy should have no further instalments. 

• less than half the amount – you might still have some money to pay. 

You can’t sell the goods, as they’re not yours to sell until you’ve made the final payment. If the issue reaches court, you can ask for a Time Order.

This is where the court reduces the payments to a level you can afford. If you want to keep the goods but struggling to pay, contact the company.

They should work with you to work out a payment plan. Make sure you tell your lender if you’re in a difficult situation. For example, if you’ve lost your job.

They might agree not to repossess something if it would make your situation worse.

Your lender should only repossess something if they can’t get the money back another way.

If you’re struggling with payments, your car finance provider must work with you to:

• provide support before you miss any payments
• put in place affordable repayment arrangements that you can pay over a reasonable length of time
• take account of your wider financial situation including debts with other lenders and essential living expenses
• make sure that your balance doesn’t escalate out of control once a repayment arrangement is in place
• recognise and respond to your needs if you’re vulnerable. If you’d rather return the car early, it’ll show up on your credit file. This is better than missing payments, which could have an impact and make it difficult to borrow money in the future.

The main types of car finance include: Personal Contact Purchase (PCP), Hire Purchase (HP), and Personal Contract Hire (PCH). Check your contract if you’re not sure what you've signed up for.

If your finance provider can't agree any repayment solutions with you to allow you to keep the car, you might be able to return it and cancel your contract. 

If you decide to return the car, let the finance company know by letter or email – and keep a copy. Make it clear that you’re returning the car and ending the agreement.

If you don’t do this you could be seen to be defaulting on your payments, which could affect your credit file.

When returning your car and ending your credit agreement early, the condition of the vehicle is important. General wear and tear are acceptable. But you’ll be charged for the repair costs of things like broken wing mirrors or larger scratches.

Check with your dealer or finance provider to find out what’s classed as fair wear and tear.  You can also find out more about what counts as fair wear and tear in the BVRLA's 2021 guideOpens in a new window as well as order a hard copyOpens in a new window

If there’s damage that doesn’t count as wear and tear, see if you can get the car repaired by a garage before returning it if that’s a cheaper option.

If your PCP term is ending soon, but you can’t afford the balloon payment, ask your finance provider how they can help.

You might decide to refinance the balloon payment with your current finance provider or choose another provider. If the value of your car has fallen below your final payment, this might not be your best solution.

With HP, you can choose to return the car early if you’ve already paid for at least half of its cost including any finance. If you’ve already paid more than half the car’s cost, you won’t receive a refund of the difference. If you have paid less than half you might have more to pay. 

If you decide to return the car, tell the finance company by letter or email and keep a copy. Make it clear that you’re returning the car and ending the agreement. When you’re ending agreements early, the condition of the vehicle is important.

Make sure you explain that you’re applying for voluntary termination. You don’t need to sign documents or fill out termination packs.

Returning the car early will usually be at the discretion of the personal contract hire (PCH) finance company.

They might ask you to pay off all or a portion of the remaining payments. They’ll consider things like the remaining term of your contract and your mileage allowance.

The cancellation policy should be in the contract you signed when agreeing to the PCH arrangement. 

It’s never too late to contact your supplier and ask for support. Their contact details will be on your bill and on their website. There are support packages your water company can offer you.

This will depend on your circumstances and might include:

• payment breaks or payment holidays
• special schemes, such as social tariffs
• adjusting your payment plan to cope with a drop in household finances
• offering advice on benefits and managing debts, especially if you haven’t struggled financially before stopping new court applications on unpaid bills and enforcement action during the current coronavirus restrictions
• finding out whether you qualify for charitable grants.

Priority Service registration is a free scheme run by your water supplier to support households who need extra help, for example, if you have health, access or extra communication needs. To find out if you qualify, get in touch with your water company. 

Your water and sewage can't be cut off in the same way as your other bills like electricity. But as an essential household bill, it’s worth considering alongside your other priority bills before other non-priority payments.

Consider getting a water meter so that you only pay for the water you use. Generally, the bigger your home and the fewer people that live in it, the more likely you are to save money with a water meter.

If you're thinking about switching to a water meter, use the Consumer Council for Water’s calculator to see if you might be able to save money.

If you do decide to switch, please contact your water company.

If you live in England or Scotland, have a water meter and you’re on certain benefits, you might qualify for the WaterSure scheme.

If you’re part of the scheme, your bill is capped at the average metered bill for your water company’s area.

The rules for dealing with missed payments are different.

A Penalty charge notice (PCN) is issued by the council on public land – such as a council car park or high street. Fines range from £50 to £160. They depend on where you are in the UK and how serious your parking offence was.

You might receive a police parking penalty – sometimes called a Fixed penalty notice (FPN).

A parking charge notice is issued by a parking operator which is private company. Shopping centre and supermarket car parks will often be run by parking operators.

If you’re at risk of missing payments for a penalty charge notice and you’re within the 28-day limit for paying the fine, find out if the council can they can extend the date by which you need to pay it.

If you’ve had multiple parking fines, your council might set up a payment plan or stagger when you make individual payments. It will help your case if you can explain how much you can afford to pay.

If you’ll miss paying your private parking fine, you’ll need to contact the parking operator to see if you can arrange a payment plan.

Fixed penalty notices are usually issued by the police or your local council. You’ll need to check who issued it and then get in touch with either the issuing police force or your local council.

If you think your penalty charge notice was unfair and you’re within the 28-day limit, you can appeal. If you do it within 14 days and your challenge is rejected, you might only have to pay 50% of the fine.

Follow the steps on your ticket as appeal rules can vary.

Private parking tickets are not official fines. If you receive one and you think it’s unfair, you can appeal it with the independent adjudicator Parking on Private Land Appeals (POPLA).

1. Stop using your credit card and concentrate on paying off what you can.
2. Create a budget to see if you can free up any cash to pay off what you owe. Set that money aside so it all goes towards paying off your bill.
3. Make at least the minimum repayment every month, even if you have a 0% deal. Otherwise, you’ll pay penalties and might lose your 0% deal.
   
4. Set up a Direct Debit to make sure you never miss a payment. You can set it up for any amount you want, but make sure it’s for more than the minimum repayment so that your balance is going down.
5. Don’t use your card for cash withdrawals or credit card cheques. You’ll be charged fees and higher interest for the entire period until you pay it off.
6. See if you can transfer your balance to a card with cheaper interest rates, but only if you have a good credit rating.

If you owe money on more than one credit card, you’ll need to work out which one to pay off first. This is likely to be the one with the highest interest rate.

For example, if you owe £1,000 on a card charging 19% interest and another £1,000 on one charging 34% interest, concentrate on the card charging 34% first and pay off as much as you can.

When the debt is cleared from that card, you can then look to pay off the credit card charging 19%.

Make sure you continue paying at least the minimum payment on each card. Otherwise, missed payments will lead to extra fees and could damage your credit rating. This would make it more difficult to get credit in future.

Transferring your balance allows you to move outstanding credit from one card to another so you:

• pay less interest on what you currently owe
• simplify your finances by combining multiple monthly payments into one.

This might not be a good option if you have a poor credit rating as you may not get offered a 0% deal or if you have other debts that you owe.

If you think it’s an option, before you apply check:

• when the lower interest rate period ends
• if there any limits to the amount you can transfer
• if you’ll have to pay fees.

How to switch

Apply for a new low or 0% interest credit card. You’ll be asked if you want to transfer balances from other cards when you’re accepted or ask your existing credit card provider to arrange a transfer.

You’ll need:

• the details of the card you want to transfer
• the card number and the provider
• the balance you want to transfer.

Make sure you pay at least the minimum payment on all your cards, otherwise you’ll face penalty charges and damage your credit rating.

But if you think you’re still likely to miss a payment, talk to your credit card provider. They can discuss options which might help you manage payments better. They’re likely to ask you about your income, outgoings and any other debts to help them decide what’s best.

The solutions they recommend will depend on your circumstances and how much you owe.

Support might include:

• putting together a realistic payment plan
• changing your payment due dates
• reducing the interest rate on your card
• extending the repayment term.

Remember that this support might impact your credit record and your ability to get credit in the future.

Charges for going into overdraft can be as much as 40% interest on what you owe. So keeping track of your account balance is one of the best ways to avoid overdraft costs.

Make it as easy as possible by:

• downloading your bank’s app if you have a smartphone
• setting up text alerts for when your balance is low
• using telephone banking
• reading all letters from your bank

It’s easy to get in the habit of not opening letters from the bank and assuming they’re just routine correspondence.

It’s important to check all letters, as the bank might be writing to tell you about a change to your overdraft limit or increase to your overdraft interest rate.

Even if you have an overdraft, you can switch using the Current Account Switch Service. The service will:

• switch your current account
• move money from your old current account to your new one. Or, if you’re in your overdraft, it can move it into the new current account
• move all your payments going out (such as Direct Debits and standing orders) and those coming in (such as benefits or salaries) to your new account
• close your old account
• make sure any payments accidentally made to your old account will be automatically redirected to your new account.

Your overdraft will need to be agreed with your new bank or building society for it to be switched. Or they might be able to offer you a way of helping you pay off your overdraft instead.

If this isn’t possible, you’ll need to repay your current overdraft before you switch.

The switching service takes seven working days. And if something goes wrong, you’re covered by the Current Account Switch Guarantee. This means you’ll be refunded any interest or charges you get as a result of any problem with the switch.

If you’re worried that you’re going to go into overdraft, follow the steps below.

1. Speak to your bank or building society as soon as possible.
2. If you feel vulnerable for any reason, explain your circumstances – your provider is obliged to be take this into consideration.
3. If you’re struggling to pay bills and are already in debt, find help as soon as possible. 

Don’t miss a payment or you might be charged a penalty or extra fees. It will also affect your credit rating.

Lenders are required to work with you to work out a repayment plan based on your circumstances to stop you getting into debt before you miss a payment. 

Your lender might agree to:

• reduce or stop charging interest on your arrears 
• be flexible with the amount you have to pay back and how long you have to pay it
• allow you to pay a small amount or nothing for a fixed amount of time
• help you make a payment plan.

Remember, any solution you agree can have an impact on your credit rating.

Are you disciplined about repaying what you borrow and have a good credit score? Then, there are occasionally interest-free or low-interest balance transfer credit card deals that transfer money directly into your bank account.

These can then be used to repay overdrafts and loans.

But these deals usually come with a fee. So you’ll need to work out whether doing this would be cost-effective for you.

Make sure you’ll be able to pay off what you owe on the card before the zero or low interest rate runs out.

Try not to spend on the card and avoid withdrawing cash with the card as it costs a lot.

This won’t be a good option if you have an impaired credit rating as you're unlikely to be offered the best deals.

There is a risk with cancelling a recurring payment that the company is going to charge you a cancelled Direct Debit fee.

It’s a good idea to talk to your bank or lender about options for keeping up with payments before you do anything. You can also ask them about what will happen if you do cancel and if there'll be any fees or charges.

If you still decide to cancel, do it at least one day before repayment is due. Make sure you tell your lender you’ve done so.

Write down the date and time that you instructed your bank to cancel the recurring payment.

If after this date, money goes from your account to the lender, complain to your bank. The bank must give you a refund by law.

It’s a good idea to follow up your phone call with a letter to your bank.

Your payday lender might suggest that you ‘roll over’ your loan for another month or so. This is a bad idea.

It means you have to pay even more charges and interest – so you end up owing much more money.

Instead, get debt advice and consider available options for dealing with your debt.

Before rolling over your loan, the payday lender must signpost you to free debt advice.

By law, they must:

• direct you to sources of free and independent debt advice
• suspend recovery of the debt for a reasonable period if you’re developing a repayment plan with a debt adviser or on your own
• treat you fairly and with consideration, allowing you reasonable time to repay the loan which might include freezing interest and suspending charges
• not bombard you with phone calls, emails and text messages
• consider accepting small token payments temporarily if your repayments mean you haven’t enough money left for essentials such as food, rent or mortgage, and utility bills.

Remember, keep copies of all emails and letters you have sent to the lender and write down details of your phone calls to them. This is evidence of how you’ve tried to contact them if they don’t reply and you need to make a complaint.

Some people aren’t aware that Buy Now, Pay Later schemes are a form of credit. So, if you don't make payments when you are expected to, many schemes will charge a late payment fee and some will charge interest depending on your contract.

Missing a payment will negatively impact your credit score and might affect your ability to get credit in the future. So it’s important you talk to your creditor before you miss a payment. They might:

• work with you to provide support before you miss any payments
• be flexible and use a full range of options to help ease any stress and anxiety you might be going through because of money problems
• put in place affordable and sustainable repayment arrangements
• take account of your wider financial situation including debts with other lenders and essential living expenses you might have
• give you enough time to repay and not pressurise you into repaying your debt within an unreasonably short time
• make sure your balance doesn’t escalate out of control once a repayment plan is in place
• recognise and respond to your needs if you’re vulnerable.

Some Buy Now, Pay Later schemes only do soft credit checks, particularly the ones you’re offered at the till.

It can be easy to keep using them as you won’t necessarily be turned down for credit because your provider won’t know what other loans you have. But juggling lots of payments can put you at risk of getting into problem debt so it’s important not to let things get out of control.

Your statement will show you the minimum amount you have to pay, but it’s important to always aim to repay as much as you can, otherwise it might take you a long time and cost you a lot to pay off any outstanding balance. Also, paying the minimum can have a negative effect on your credit rating.

If you can, set up a Direct Debit to make sure you never forget a payment or you'll be charged late fees and interest. If you’re living on a variable income, or you’re worried there might not always be enough money in the account to cover it, making manual payments will help you avoid fees for failed Direct Debits.

Store cards often charge high rates of interest so a balance transfer to a 0% or lower interest rate might lower your payments by moving what you owe to a new card, but only if you have a good credit rating. If your credit rating is impaired you're unlikely to be offered the best deals.

But before taking one out, shop around for the best deals, because the longer terms often come with a transfer fee.

When looking for the right card, work out how long you need to pay off what you owe and try to find one with a 0% period that gives you enough time to repay with the lowest fee you can get.

If you still have an outstanding balance at the end of the 0% period, Annual Percentage Rates (APR) will apply and you’ll start being charged interest on what you owe again.

Even though mobile phone bills aren’t classed as prority debts, keeping your mobile phone is an essential lifeline and a bill you should prioritise if you don’t have a landline. 

Many providers have support in place to help you if you’re struggling with payments, including:

• changing your bill date
• setting up an affordable repayment plan
• moving to a different tariff, or
• lowering your spending cap.

If you’re on a mobile phone contract, you might be able to move to a cheaper pay-as-you go tariff or SIM-only deal. But find out first if you have to pay a fee to end your contract early.

If you’re struggling to pay your bill, contact your provider as soon as possible and explain your situation. They might be able to help you out, such as:

• changing your bill date
• setting up an affordable repayment plan
• moving to a different tariff, or
• removing data caps on fixed broadband services.

Some broadband providers offer low-cost plans to help you make mobile calls and get online if you’re getting certain benefits, including: 

• Universal Credit 
• Jobseeker’s Allowance
• Pension Credit  
• Employment and Support Allowance.

If you’re looking for work, you can apply through your work coach for a voucher to exchange for free broadband from connectivity provider TalkTalk. 

The voucher allows you to get six months of TalkTalk’s Fibre 35 broadband service with no contract or credit check required. Data usage limits are uncapped (within the fair data usage limits). 

After six months, you can choose to roll onto a contract with TalkTalk or cancel the service. Whatever you choose to do, there will be no cancellation costs or sign-up fees.

If you don’t think you can afford to pay, contact your provider as soon as possible and explain your situation. They might agree to help you by:

• giving you a payment plan
• reducing your bill
• giving you more time to pay
• increasing your data or download limit
• moving you to a contract that suits your needs better.

If you can’t afford services such as Netflix or Spotify, you might be able to cancel them without being charged a penalty. But first, check the terms of your contract.

The most important thing you can do is be honest with the person you owe money to, and not ignore the problem. They might be able to offer help or give you some time to sort things out.

It’s a good idea to make a budget to help you see what’s coming in, going out and what other bills and debts you have. That way, you can use it to show your family or friend so they can see your financial situation.

Then sit down with them and work out how often you'll pay and how much, making sure it’s affordable so you can stick to the plan.

If someone you know who lent you money is threatening you, charging excessive amounts of interest on your loan or has taken something like your passport or bank card away from you, this behaviour means they are a loan shark.

It might seem strange to think about someone you know as being a loan shark with someone you care about, but it’s really important you get advice. Call Stop Loan Sharks on 0300 555 2222Opens in a new window to safely make a report.

They’ll contact you and give you advice for dealing with the situation. They’ll also explain what will happen next, and help you get the financial, housing or debt support you might need.

If you can’t repay your loan by the deadline and you don’t want your item to be sold, you can ask the pawnbroker if they’re prepared to extend the deadline, but they’re not obliged to agree.

If you borrowed up to £75 and you can't repay the loan, ownership of the item will pass automatically to the pawnbroker.

If you borrowed more than £75, the pawnbroker could sell the item and keep the proceeds - but they have to try to get the best value for the item, and if there’s any surplus (after the debt is paid and costs deducted such as auction costs) they have to pay this to you.

If the loan is for over £100 the pawnbroker must tell you in advance if they’re going to sell it.

This gives you a chance to pay them and get your goods back.

If you’ve borrowed up to £75, you can ask the pawnbroker for a ‘standard form’ to fill in to say that you have lost the ticket but that the goods are yours.

If you’ve borrowed more than £75, you would need to sign a statutory declaration.

This might involve going to a magistrate or a Commissioner for Oaths, or a Justice of the Peace if you live in Scotland.

You can also go to a solicitor, but they are likely to charge a fee for this.

If you don’t repay the loan or extend the credit, the pawnbroker can sell your goods and use the money to pay off your debt. If you feel the pawnbroker has sold it for less than it was worth, you'll need evidence of the value of the item as proof.

If you are not happy about the price recovered for your item, first, complain to the pawnbroker in writing.

If the pawnbroker doesn’t respond to your complaint or you don’t manage to sort out the problem within eight weeks, you can take your complaint to the Financial Ombudsman Service (FOS).

You can take a pawnbroker to the Small Claims Court but there are fees to pay and there is always a risk the settlement reached might not be what you want.