This year has seen the cost of living crisis spiral out of control, leading to rising debt as households grapple with higher outgoings.\u00a0Britons are paying more for almost everything, from mortgages and rent to food and energy bills.\u00a0Energy costs are now a bigger drain on bank balances, with the average household using \u00a33,549 of power …<\/p>\n","protected":false},"author":1,"featured_media":38977,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[161],"tags":[],"_links":{"self":[{"href":"http:\/\/www.brandon.ddtest.info\/multisite-test\/wp-json\/wp\/v2\/posts\/38976"}],"collection":[{"href":"http:\/\/www.brandon.ddtest.info\/multisite-test\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/www.brandon.ddtest.info\/multisite-test\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/www.brandon.ddtest.info\/multisite-test\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"http:\/\/www.brandon.ddtest.info\/multisite-test\/wp-json\/wp\/v2\/comments?post=38976"}],"version-history":[{"count":0,"href":"http:\/\/www.brandon.ddtest.info\/multisite-test\/wp-json\/wp\/v2\/posts\/38976\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"http:\/\/www.brandon.ddtest.info\/multisite-test\/wp-json\/wp\/v2\/media\/38977"}],"wp:attachment":[{"href":"http:\/\/www.brandon.ddtest.info\/multisite-test\/wp-json\/wp\/v2\/media?parent=38976"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/www.brandon.ddtest.info\/multisite-test\/wp-json\/wp\/v2\/categories?post=38976"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/www.brandon.ddtest.info\/multisite-test\/wp-json\/wp\/v2\/tags?post=38976"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}![](\"https:\/\/www.stl.news\/wp-content\/uploads\/2022\/12\/Pay-off-debt-in-2023-Five-steps-to-clear-it.jpg.webp\"\/)
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This year has seen the cost of living crisis spiral out of control, leading to rising debt as households grapple with higher outgoings.\u00a0Britons are paying more for almost everything, from mortgages and rent to food and energy bills.\u00a0Energy costs are now a bigger drain on bank balances, with the average household using \u00a33,549 of power per year \u2013 though these bills are capped at \u00a32,500 a year for typical use under the Government\u2019s energy price guarantee<\/a>, rising to \u00a33,000 from April 2023 until April 2024.Soaring bills mean the average UK adult\u2019s debt \u2013 not counting mortgages \u2013 rose from\u00a0\u00a325,879 in 2021 to \u00a334,566 in 2022, according to money.co.uk. Budget better: It may sound simple, but sitting down and working out all your costs is the first step on the road to getting out of debtAlmost two million households missed a major bill\u00a0payment\u00a0<\/a>in the last month due to the rising cost of living, the consumer charity Which? has said.If you are in debt, or worried for someone who is, This Is Money has rounded up five pieces of advice from debt experts on how to pay off what you owe in 2023.1. Make a monthly budgetExperts agree that the first step in dealing with debt is to take stock of the money you have coming in and out each month.Andrew Hagger, of personal finance experts MoneyComms, said: \u2018Without knowing exactly where you are financially, it is difficult to make plans.\u00a0What to do if you are struggling with energy bills\u00a0Just one in five (18 per cent) of us are putting the central heating on as much as we need to, according to research by survey firm YouGov earlier this month. Even worse, 15 per cent of people cannot afford to heat their properties at all.If you can\u2019t afford your energy bills, regulator Ofgem has three steps to follow.1) Speak to your energy firm\u00a0\u2013 it may set up a payment plan, give you a hardship grant or give you more time to pay2) See what help is out there \u2013 in addition to energy firms\u2019 schemes and grants, the Government has several cost of living payments you might qualify for. Citizens Advice has a full list<\/a>\u00a03) Get proper advice \u2013 speak to an organisation such as the Money Advice Service, National Debtline or StepChange \u00a0 \u2018People often don\u2019t know exactly what they owe, and when they take a guess they often aren\u2019t anywhere near.\u2019\u00a0When in debt it is crucial to identify exactly how much you owe to which companies, what the repayment deadlines are, and how much interest you are being charged.\u00a0It is also important to work out your other regular costs, and how much money you have coming in to deal with all this.Sue Anderson, head of media at debt charity StepChange, said: \u2018While it may sound simple, creating a budget can really help you to understand and take control of your finances.\u2019Make a note of all the money you have coming in, including wages, benefits, pensions and housekeeping money from your partner or relatives. Next look at how much you\u2019re spending by writing down everything you buy over a month \u2013 think about bills, the food shop, clothing, car or travel costs, subscriptions and so on.\u2019Once your budget is complete, subtract your estimated outgoings from your income. This is your disposable income, and it\u2019s what you\u2019ll have available to clear your debt.\u2019This is Money\u2019s household budget calculator <\/a>lets you input your salary and regular expenses to work out your monthly income and outgoings.\u00a02. Can you bring in any extra cash?If your normal disposable income won\u2019t cover your debts, you might be able to increase it in the short term.If you are in work, the obvious way to do this is to look for a better-paid job, seek a promotion or work more hours \u2013 though this is not possible for everyone.\u00a0There are plenty of other ways to make a few extra pounds, however. We rounded up 20 of them here<\/a>, from renting out your driveway to switching your current account.\u00a0You could also try using cashback websites such as TopCashback or selling unwanted clothes and household items, StepChange said.\u00a0If you\u2019ve recently seen a reduction in your income, for example because you\u2019re working on reduced hours or have been made redundant, you may also be able to claim Government support.The Government has a benefits calculator<\/a>\u00a0that works out if you are owed any extra financial help.3. Can you make any savings?There are many ways to save money, and anything you save can be put towards those debt repayments.It could be as simple as doing your food shop at a cheaper supermarket, checking if you\u2019re eligible for a social tariff <\/a>on your broadband or cancelling unnecessary subscriptions.Hagger said: \u2018Check if you are still paying any unwanted subscriptions, direct debits and so on.\u2019\u00a0 With some planning and expert help you can get on the road to being debt free next year even during a cost of living crisis4. Prioritise repaymentsOnce you have done all this, you may be able to pay off all your debt within a few months. But if you cannot, StepChange said there are further steps to take.Sue Anderson said: \u2018If you can\u2019t clear your debts quickly, don\u2019t panic. However, it is important to know how to prioritise.\u2019 What to do if you are in mortgage arrears\u00a0The first thing to do is speak to your mortgage lender.\u00a0They might be able to offer you a break from paying your mortgage, to give you breathing space.If you are on a repayment mortgage, some lenders may let you swap to an interest-only deal<\/a>, which means paying less per month as you are not paying off the loan, just the interest.Mortgage lenders may also let you extend the term of your mortgage. This means your monthly payments drop, but you will repay more in the long term. Certain types of debts should be more of a priority, as the consequence of not paying them is more serious than others.\u00a0These can include your rent, mortgage, energy bills and council tax, among others.Once you have paid off these costs, try to pay off the minimum on every debt you have. This will stop what you owe getting any larger as interest racks up.As soon as you have managed that, focus on paying off the debt with the highest interest and charges first. If you have several different debts, consolidating them into one can help get a grip on them.The most popular way to do this is with a 0 per cent interest credit card.\u00a0These cards charge no interest at all for a limited period.These can help with getting out of debt, as any balances moved onto a 0 per cent card do not build up interest for a certain period.This lets you pay off debts without interest racking up, helping you get out of debt quicker. Then you have to be sure you can pay off the debt before the 0 per cent period ends, or you will start paying interest again.>> How to reduce credit card interest with 0 per cent deals and balance transfer<\/a> Consolidating: 0% credit cards are one of the most popular ways to get all your debts in one place and give yourself some space to start payingTry not to use the card for spending or taking cash out, and make sure you make the minimum repayments, as otherwise you can lose the 0 per cent interest benefit.\u00a0\u00a0\u00a0\u00a0\u00a0There are a few hurdles to getting a 0 per cent card. Hagger said: \u2018Trying to refinance can be tricky. You can still get 0 per cent balance transfer credit cards but you may need to have good credit first.\u2019First off, you have to get accepted. The exact terms of these cards will vary slightly depending on your financial circumstances, such as your salary, credit score and how much you spend on bills.Banks such as NatWest are offering cards with 0 per cent interest for 33 months, with this rate jumping to 22.9 per cent after that point. Top ten 0% interest credit card deals PROVIDER\u00a0 CARD NAME\u00a00% TERM\u00a0APR\u00a0\u00a0 NatWest\u00a0Longer Balance Transfer Credit Card Mastercard33 months\u00a022.9%\u00a0\u00a0 Royal Bank of Scotland\u00a0Longer Balance Transfer Credit Card Mastercard\u00a033 months\u00a022.9%\u00a0\u00a0Ulster Bank\u00a0Longer Balance Transfer Credit Card Mastercard\u00a033 months\u00a022.9%\u00a0\u00a0Sainsbury\u2019s Bank\u00a030 Month Balance Transfer Credit Card 30 months\u00a021.9%\u00a0\u00a0Barclaycard\u00a0Platinum 30 Month Balance Transfer Visa\u00a030 months\u00a022.9%\u00a0\u00a0Halifax\u00a0Longest 0% Balance Transfer Credit Card Mastercard\u00a029 months\u00a022.9%\u00a0\u00a0Santander\u00a0Everyday Long Term Balance Transfer Credit Card Mastercard\u00a028 months\u00a022.9%\u00a0\u00a0Virgin Money\u00a028 Month Balance Transfer Credit Card Mastercard\u00a028 months\u00a022.9%\u00a0\u00a0M&S Bank\u00a0Credit Card Transfer Plus Offer Mastercard\u00a028 months\u00a023.9%\u00a0\u00a0Barclaycard\u00a0Platinum 27 Month Balance Transfer Visa\u00a027 months\u00a022.9%\u00a0\u00a0 Source: Moneyfacts, correct as of 23 December 2022But even if a credit card is advertised at 0 per cent interest, there may be a fee to pay when you move money onto it. These are called \u2018balance transfer fees\u2019, and most are in the region of 2 to 4 per cent.Some banks offer credit cards with no balance transfer fees, such as Barclaycard and HSBC. But again, bear in mind providers offer different deals to different people.5. Don\u2019t wait to get helpEven if you have tried all the above and it has not worked, you can still get help to get out of debt.Anderson said: \u2018If you\u2019re worried about your finances or experiencing problem debt, you don\u2019t need to suffer in silence. Don\u2019t delay in getting in contact with a debt advice organisation for free and impartial advice.\u2019These organisations may be able to help:\u00a0\u00a0Money\u00a0Advice Service (soon to be called Money Helper) \u2013\u00a00800 138 7777 or online<\/a>\u00a0\u00a0National Debtline \u2013\u00a00808 808 4000 or online\u00a0<\/a>StepChange \u2013\u00a00800 138 1111 or online\u00a0<\/a>Citizens Advice \u2013\u00a00808 223 1133 or online<\/a>\u00a0<\/a> THIS IS MONEY\u2019S FIVE OF THE BEST CREDIT CARDS Some links in this article may be affiliate links. If you click on them we may earn a small commission. That helps us fund This Is Money, and keep it free to use. We do not write articles to promote products. We do not allow any commercial relationship to affect our editorial independence.<\/p>\n<\/div>\n\n
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