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Four simple steps for dealing with debt

By Lucy Bower

31 October2021

Debt is growing in the UK, so there could be lots of people out there who need debt help. We offer four simple steps that could help people manage their debt more effectively.

According to the August Aviva Family Finances Report, families in the UK typically have unsecured debts of 10,563 - and that doesn't include a mortgage. That's a lot of debt, and the figure's growing. In May this year, just a few months earlier, family debt was put at 9,314, so it's increased by 13% since then.

Families are also spending more on repaying their debt. Debt repayments have increased from 114 in May to 141 a month in August. That's an increase of 24%.

So households all over the UK are under increasing financial pressure, with growing debts, pay freezes and price rises. Here are four simple steps that can help people to deal with debt before it becomes a real problem.

1. Budget

Monitor your income and how much you spend. A practical and up-to-date budget should outline where your money is going every month and is central to managing the household's finances. A budget can help you see where you stand right now, and help plan what to do next - whether that's saving for the future or repaying expensive debts.

2. Stop borrowing

If you have existing debt, try to avoid borrowing any more - especially if you're already struggling to repay that debt. The money you'll save on interest could go towards savings instead.

3. Borrow wisely

Sometimes borrowing money makes sense, or it's simply unavoidable. In that case, you need to do your research before you sign up to any credit agreement. You want to know how much it will cost and how long it will take you to repay - and whether you're getting the best deal.

4. Seek advice if you're having trouble

At the early signs of debt trouble, seek advice from a debt expert. Smaller problems should be dealt with sooner rather than later. Sometimes, simply amending your budget to bring it up to date - and cutting back on what you spend - can be enough to stop things getting any worse. If you ignore the warning signs, a small problem with your finances can spiral into something completely unmanageable, leaving no alternative but bankruptcy. Debt solutions like debt management and IVAs (Individual Voluntary Arrangements) are there for people who need professional help to get out of debt.

Try our debt solution finder

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Please remember, this is just an information tool. We would always recommend you speak to a debt advisor for the most appropriate way to resolve your debt problems.
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