NEARLY 11million people are struggling to keep up with their regular payments – up three million from last year – says the Financial Conduct Authority.
If you don’t have enough in your bank account to cover your outgoings, it’s important to know which ones to pay first.
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Missing some can be much worse than others – putting you at risk of court action or losing your home.
Sarah Pennells, a personal finance expert at insurers Royal London, says: “The earlier you seek help, the more options may be available.”
Harriet Cooke explains why these are the bills to prioritise and how to get help if you really can’t pay . . .
First, check your benefits
BEFORE you do anything, make sure you’re not missing out on vital support as a surprisingly large pot of available cash goes untouched each year.
Deven Ghelani, an expert on benefits at analysts Policy In Practice, says: “About £19billion of support goes unclaimed each year, which is unbelievable as we face a cost-of-living crisis.
“Too many people don’t realise that they’re missing out.”
Do a quick check using one of the free eligibility calculators at gov.uk/benefits-calculators.
Claiming Universal Credit or Pension Credit can also open the door to a host of other support, including cost-of-living payments, free prescriptions, cheaper broad-band and lower water tariffs.
Deven says that lots of cash available through local council and individual suppliers’ schemes is not claimed either.
The calculator available at betteroffcalculator.co.uk can help you track down what’s on offer.
When juggling debts, charities such as StepChange (stepchange.org.uk, 0800 138 1111) or National Debtline (national debtline.org, 0808 808 4000) can help you budget and negotiate with any companies you owe money.
They can also apply to pause interest and fees.
Keeping a roof over your head
MORE than 1.4million borrowers have a fixed-rate mortgage that is going to expire this year — and they face paying hundreds of pounds extra a month.
Alex Hasty, of Compare The Market, says: “Those soon coming to the end of a fixed-rate deal are likely to face a big repayment shock.”
If you are one of them, check on comparison sites and speak to a mortgage broker early to arrange a new deal.
It will be more than you’re currently paying, but you could save an average £400 a month by doing this instead of rolling on to your lender’s standard rate, according to Compare The Market.
Ask your lender about a payment break or other help if you’re in difficulty, but remember any reductions they agree to will have to be made up later.
If you miss three or more payments a lender can take you to court to try to repossess your home, but only as a last resort.
If you’re on certain benefits like Universal Credit you can apply for a loan through the Support For Mortgage Interest scheme.
Visit gov.uk/support-for-mortgage-interest/how-to-apply.
If you rent, speak to your landlord and see if they’ll agree to an affordable repayment plan in writing.
But if you miss two months’ payments or more, your landlord can take you to court to try to evict you.
Aim to reduce the amount you owe to below two months’ rent before the hearing as this means you cannot be evicted for arrears.
For help with housing worries, contact Shelter (shelter.org.uk, 0808 800 4444).
Stay connected to utilities
FOR the time being, gas and electricity firms cannot make you have a prepayment meter installed if you fall behind on bills.
There is a temporary hold on this while regulator Ofgem makes sure suppliers play by the rules.
It’s not known when “forced installations” will be back, but suppliers won’t be able to push them on over-85s or those with certain serious health problems.
For others, they’ll first need to contact you at least ten times to try to agree a payment plan.
Ask your supplier if it has a hardship fund.
Firms can also give emergency meter credit, plus some councils offer fuel vouchers.
You can’t be cut off by a water firm for failing to pay, but speak to them if struggling.
Around 5.7million households on benefits miss out on cheaper water tariffs, research found, and 5.3million miss cheaper broadband tariffs.
Alex Tofts, of comparison site Broadband Genie, says: “Many suppliers have kept these deals hidden away from home pages.”
These social tariffs could save you up to £200 a year, advises consumer champion Which?.
If you don’t qualify, you could still save hundreds a year by switching mobile, broadband and landline if out of contract.
Your phone and internet provider can cut you off if you don’t pay — but must treat you fairly, especially if you’re vulnerable.
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Other household outgoings
COUNCIL tax debts and child maintenance payments are up there with the priority debts.
Both of these can result in court action and bailiff visits if left unpaid.
If you rely on a car for work or other reasons, hire-purchase payments may be crucial to stop your vehicle being repossessed.
Overdraft, personal loan payments and other bills are lower priorities if you are struggling to make ends meet.
But missed payments for these and many other bills stay on your credit file for at least six years, making it harder for you to borrow money during that time.
Renters’ rights boosted
RULES to protect renters from being evicted for no reason are finally on their way.
Four years after a ban on “no-fault” evictions was first promised, the Government this week put new laws before Parliament.
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It’s a win for Sun Money, which last week called for no more delays to the reforms.
Campaigners argue that the threat of eviction can leave tenants scared to complain about problems such as damp and make it hard to object to rent hikes.
Polly Neate, chief executive of housing charity Shelter, said: “For far too long our emergency advisers have helped renters facing anguish and uncertainty, paying sky-high rents in return for poor living conditions, with no protection or security if they complain.”
She added: “The millions of people renting in England are at last one step closer to fairer, more secure housing.”
If the reforms are approved by MPs and the Lords, it will still take at least six months before the ban comes into force for new tenancies and longer for renters currently in contracts.
Tenants can still be evicted if they don’t pay rent, behave antisocially, or if the landlord needs to sell the property or move back in.
The reforms will also make it illegal for landlords to have a blanket ban on renting to people on benefits or families with kids.
Also, renters will now be allowed to keep pets unless their landlord has reasonable grounds to refuse this.
Disability top-up done
MORE than six million people with disabilities stand to get a £150 cost-of-living payment next month.
The Government has confirmed that the top-up for those who receive disability benefits will be paid out between June 20 and July 4.
If you qualify, you should get the payment automatically in the same way that you normally get your benefits – so watch out for scams telling you to make a claim.
In order to get the cash you must have been receiving one of the main disability benefits on April 1, 2023 – or have already applied for it.
The disability payment is on top of the £900 cost-of-living payment for those on certain low-income benefits which is paid out in three chunks.
The first instalment, of £301, should have arrived in bank accounts by now.
If you receive Universal Credit or other benefits and believe you’re entitled to the cost-of-living help, you can report missing payments on the gov.uk website.
You have around three weeks to report a missed payment via the Government portal – after that you will have to claim the missing amount by making a note in your online benefits journal.
