When times are tight it can be a struggle to find the money you need for everyday expenses – and for some this includes essential spending such as on food.
New research by the Children’s Society charity has found over 620,000 families in England and Wales are spending more on overdue bills than on food.
The same study found two in five (38%) of UK families say they’ll have to borrow money to pay for essentials if the cost of living increases.
These leaves a huge number of people in danger of problem debt – especially if an unexpected bill or expense comes along which you can't afford to pay.
The Children’s Society study also found close to half (46%) of families who had a car, central heating or appliance break down in the last year had to borrow money to pay for the replacement.
The danger of falling behind on bills or using up all your income each month is how easy it is for you to be pushed into problem debt. Just one unexpected cost could result in taking on more borrowing to cover the expense.
A savings buffer is the best way to protect yourself against these emergency costs, yet Money Advice Service research found that four in ten adults have less than £500 in savings available to cover unexpected costs.
Breathing space to pay off debts
The Children’s Society feel a “breathing space”, where debts are frozen for 12 months could help people get back on their feet.
Caroline Siarkiewicz, Head of debt advice for the Money Advice Service, said “It is worrying to see that so many families are falling behind on their bills which is impacting on their ability to manage day to day… Breathing space is vital for people who are trying to resolve their debts. We recognise the importance of this within the UK Financial Capability Strategy and we continue to work with HM Treasury, the Insolvency Service and organizations across the debt sector to ensure people in debt, across the UK, have the support they need.”
Getting help with debts
Ignoring debts will just make your financial situation worse and risk the chance of you falling into a debt trap with spiraling fees and charges.
Families who are struggling should seek free debt advice as soon as possible. Advisors can help you to prioritise debts and ensure that sufficient funds are available for essentials such as monthly bills, food and savings.
It can make a huge difference. Our figures show close to two thirds of people who received regulated advice last year were repaying the money or had repaid it in full within six months.
Not only does seeking debt advice help you clear the money owed, but it can have a hugely positive effect on wellbeing, with three quarters of people who sought advice feeling less stressed about their finances.