How to manage and reduce your debt
The number of people with money worries has soared over the past 12 months, according to the debt charity StepChange. Its research revealed 45% of British adults had found it difficult to keep up with household bills and loan repayments in the past few months, up from 30% a year ago and 15% in March 2020. So if debt is becoming a problem for you, what can you do about it?
Another piece of research by StepChange showed 55% of its clients had waited more than a year before seeking help with their debt. Sue Anderson, spokesperson at StepChange, says: “A lot of people have waited, and suffered in silence. They try to use other coping mechanisms, before they get in touch with us.”
Reasons for delaying vary – but stigma is still a real problem. Research from the Financial Conduct Authority (FCA) shows that 42% of people who were struggling financially and had ignored attempts by their lenders to get in contact about missed payments, had done so because they felt ashamed.
Misconceptions about the ways in which people get into problem debt endure – and many people who find themselves in trouble worry that others will think the issue is a result of poor money management. In fact, StepChange says the vast majority of its clients have found themselves in financial difficulty because of a life change that has led to a sudden drop in their income: redundancy, bereavement or ill health can all, of course, have a serious impact – and more recently, soaring energy, food and fuel bills have led people into difficulty.
Whatever the reason, Anderson says: “As soon as you recognise that you could be in trouble, you should take action.”
Identify your priority debts (where the consequences of defaulting are potentially very serious, such as rent
Read more on theguardian.com
