If you're experiencing a change in your financial circumstances due to the increased costs of living, find out what you can do to help yourself get back on track.
Millions of people access financial help every year. There’s a wide range of free services available, as well as tailored support from your lender.
If you’re finding it hard to keep up with payments or manage your debts, MoneyHelper[1] is a government-backed service that can help you find a way forward.
Read more about the support available for mortgages.
If you think your lender or provider isn’t treating you fairly, you should complain directly to them. If you’re not happy with their response, you can contact the Financial Ombudsman Service[2].
Managing your financial situation
If you’re struggling with your finances, there are several steps you can take to start managing your situation.
Start by making a list of the organisations that you need to make payments to.
Note down how much you pay and whether you are behind on any payments. This includes essential household bills such as electricity and gas, as well as loans and any other debts or repayments you have.
If this is too difficult, a debt adviser can help you for free.
Use MoneyHelper’s debt advice locator tool[3] to find free debt advice near you.
It’s important you prioritise your debts. Some debts will be more urgent than others because the consequences of not paying them can be more serious. These could include your:
- mortgage or rent
- council tax/rates
- gas or electricity bills
MoneyHelper has useful information on how to prioritise your debts[4].
Working out a budget
Once you know which of your debts are a priority, you can work out a budget.
This will help you understand how much money you have, so you can pay your commitments.
You might want to use a budget tool, such as MoneyHelper's Budget Planner[5], or a tool provided by a debt adviser.
If you're worried about keeping up with payments, contact your provider as soon as possible to let them know. They may be able to talk to you about options for changing how or when you pay.
Support from your lender
If you’re finding it difficult to pay your mortgage, credit card or personal loan, your lender should give you support tailored to your circumstances. This support will be available if you’re struggling for the first time or if you’ve already had help.
Your options could include:
- Making reduced payments for a temporary period.
- Changing your mortgage or loan term to make your payments more affordable.
- In some circumstances, making no payments for a temporary period.
- Being directed to sources of free debt advice.
Lenders should also consider whether they should suspend, reduce or waive interest fees or charges.
Contact your lender as soon as possible if you’re finding it difficult to make payments. Talking to your lender will not affect your credit file, and they can support you. If you agree an arrangement with them, this will be reflected on your credit file. But this would also happen if you miss payments.
You can find guidance on talking to your lender from MoneyHelper[6]. Or find out more about your rights and what you can expect from providers[7].
Support from insurance providers
If you’re struggling to pay your insurance costs, you might be thinking about cancelling your cover. But before you do, it’s important that you contact your provider to find out what support they can give you.
Depending on your circumstances, this support could include:
- Looking at your risk profile to see whether your level of cover should be changed, which could mean lower premiums.
- Considering whether there are other products that better meet your needs.
- Waiving fees for adjusting or cancelling your insurance policy.
- Making reduced payments for a temporary period.
- Agreeing a repayment plan.
If you’re deciding whether to renew your insurance, the renewal quote your insurer gives you can’t be higher than the quote they would offer you if you were a new customer. But that doesn’t mean it’s the best product for you.
You should consider shopping around to see if other providers offer lower prices. Make sure you check that the new product includes the cover you need and an excess you can afford.
It’s also important to remember that paying for your insurance via monthly payments (typically using premium finance) can make your insurance more expensive.
Find out more about buying insurance from MoneyHelper[8].
Changing your pension arrangements
When you’re struggling financially, you may consider stopping or reducing your pension contributions. You may also consider accessing your pension or drawing down your pension more quickly, if you’re eligible.
But before you decide, make sure you fully understand your options and the consequences of each.
If you’re in a defined benefit[9], or final salary pension scheme, it’s likely to be in your best interests to stay in the scheme.
You can find free guidance on leaving a workplace pension or reducing your contributions, and the consequence of doing so, from MoneyHelper[10].
Remember to be cautious of anyone contacting you unexpectedly about your pension. Scams can be convincing and hard to spot. Find out more about how pension scams work and how to avoid them[11].
