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Reducing debts – what’s the key? We ask our debt specialist

Household debt is an issue in the UK that doesn’t seem to be going away. In fact, a major new report by the Centre for Social Justice (CSJ) has warned 8.8 million people are now over-indebted due to more than two years of increasing household debt.

The report also showed that 15 million people are borrowing in order to cover their bills.

What can you do if you have been affected by debt or want to avoid being caught in a debt spiral?

We asked Caroline Siarkiewicz, Head of UK debt advice at Money Advice Service, for her thoughts.  

Talking about money – the first step

The most important step if debt is worrying you, is to have that first conversation. This can feel intimidating, but we know that free debt advice really works in helping people to get to grips with their debt.

In fact, almost 90% of people take action after receiving advice and 75% begin to reduce their debts.

Don’t suffer in silence. There are a number of organisations with experienced, knowledgeable people who can help you, which are both confidential and free.  These organisations help hundreds of thousands of people every year and you can easily get in touch with them online, over the phone or face-to-face.

Making that first step to talk may not feel easy but, and this is true for many people, the benefits of taking it could transform your life for the better.

 

Financial capability – steps to strengthen yours

We believe financial capability and debt advice are mutually reinforcing.

Individual financial capability is also important to help safeguard against getting into a debt spiral in the first place.

This may sound complicated, but it simply means taking steps to help keep your finances healthy.

Take a look at your incomings and outgoings and consider where you could cut back. Pinpointing any money leaks can be a great first step in reducing them. Make sure that when you borrow money you’ll be able to repay and always think about whether you need to borrow or could save up instead.

This doesn’t mean you have to stop living your life. Making swaps, such as where you do your supermarket shop, can make a big difference. Switching your energy provider can also help you save.

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  • Joanna Rees / 14 June 2015

    All these tips are very useful.I am going to see debt adviser

  • Nina / 6 June 2015

    I owe nobody anything and manage my finances well. Why am I plagued every day by myriad emails offering to solve my financial problems or offering me expensive credit cards?...it is driving me crazy. A lot of the addresses to unsubscribe are in the USA. What is going on?