How to get out of debt as calls to money helpline expected every four minutes this month

A FREE debt helpline is expected to be inundated with calls this month in a new worrying sign that more families are struggling to cope financially.

Money Advice Service says it anticipates taking one call every four minutes throughout January as households try to get back on track after an expensive Christmas.

This is the equivalent of around 15 calls an hour, based on the service’s free helpline being open for 230 hours over this month.

Money Advice Service says traffic is expected to peak each Monday, with January 20 likely to be the busiest day as credit card bills for December arrive.

Last year, Money Advice Service took 3,500 debt calls in the same period.

Money Advice Service is part of The Money and Pensions Service, a Government-sponsored body set up in 2019 that also includes the Pensions Advisory Service and Pension Wise.

Acting chief executive Caroline Siarkiewicz said: "We know what a difficult time of year this can be for families who are worried about the bills piling up.

"It can be tempting to avoid confronting money worries after an expensive Christmas but the sooner you act, the easier it will be."

How to cut your bills

IF you're struggling financially, you might be able to cut the cost of your bills to help you get out of the red.

Council tax: You can apply for a council tax reduction on the Gov.uk website but you'll need to meet certain criteria. Your bill could be cut by as much as 100 per cent if you’re on a low income or claim benefits. Carers who look after someone in the household for at least 35 hours a week are also exempt from paying.

Water: Households might be able to save money by getting a water meter but it all depends on how much you're using. To check if it's finacially worthwhile, use the Consumer Council for Water's free ater meter calculator.
Rent: If you have the space available and your landlord or local authority says it's ok to do so, you might want to consider getting a flatmate. Not only will you split the cost of the rent, but also the other bills.

Mortgage: If you get into debt with your mortgage payments, don't wait for your lender to chase you. Work out what you can afford using the Citizens Advice budgeting tool so you can discuss your payment options moving forward with your mortgage provider.

TV licence: Some households are eligible for a reduced fee or free TV Licence. Pensioners over the age of 75 currently get a free TV licence but this is due to change in June 2020. Check here to see if you are entitled to a reduced or free rate.

How to get out of debt

It's never a good idea to ignore money problems, especially if you have debt hanging over you.

Thankfully, there are plenty of free services and steps you can take to get your finances back on track.

Speak to someone for free: There are lots of groups who can help you with your money.

Most of them can offer you free guidance and help in person, over the telephone or online.

  • Money Advice Service – 0800 138 7777
  • Citizens Advice – 0808 800 9060
  • StepChange – 0800 138 1111
  • National Debtline – 0808 808 4000

Don't ignore bills: Ignoring your bills won't make them go away, in fact it'll likely escalate the problem and you'll end up with an even bigger sum to pay.

Start by working out exactly what you owe and when you need to pay it back.

Once you've done this, you can prioritise your bills and work toward finding a way to make the payments.

Make a budget: Now you know what you need to pay back, you can start budgeting.

Use an online tool like one from Citizens Advice to help you work out how much money you have coming in, and going out, each month.

This information can then be used to create a detailed plan of how much you can afford to pay back.

Switch and save: You might be able to get a cheaper deal elsewhere on anything from your utility bills, to your internet, simply by searching around.

In fact, MoneySavingExpert says families can save £330 on average by switching from Standard Variable Tariffs (SVTs) to a better rate.

Use a comparison site like MoneySuperMarket or Energyhelpline to see what deals are available.

Get a balance transfer card: Pricey credit card interest can add to your debt pile, especially if you don't keep on top of it.

A better option could be getting a 0 per cent balance transfer card.

These types of card will let you transfer an existing balance to a new card and gives you the chance to clear it fully without incurring interest.

You'll need to have a good credit rating to qualify for one, so do your research first before applying.

Use MoneySavingExpert's eligibility calculator to find out which cards you'll likely be accepted for.

See if you're entitled to benefits: If you're struggling financially, you might be entitled to benefits – particularly if you're on a low income wage or care for someone.

Help ranges from tax credits, job seeker's allowance and universal credit.

Citizens Advice can help you see what help is available and there's a benefits calculator on the Gov.uk website.

Also consider: If you're really struggling to see a way out, you can find information about Debt Management Plans (DMP) and Individual Voluntary Arrangements (IVA) on the Money Advice Service website and on the Government's Gov.uk site.

A DMP is an informal agreement that's proposed to creditors individually, while an IVA is a lesser form of bankruptcy which is a legally binding agreement.

But these plans aren't suitable for everyone, so read the terms and conditions very carefully so you know exactly what you're signing up to.

Many firms charge a fee for the service, either upfront or one that's incorporated into your monthly payments.

Here's how to pay off your overdraft before banks like HSBC, NatWest and Barclays hike rates up to 40 per cent.

We've previously reported on how councils get just 27p from every £1 collected by bailiffs – and it’s pushing households into debt.

Meanwhile, read how one businessman paid £1,200 bailiffs fine with a car boot full of 1p coins.

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