Where to get help with the cost of living

Cost of living squeezing finances

Millions of people are struggling to pay household bills as a result of the cost of living crisis. In Oct 2023, our research has shown on average we are spending an extra £494 per month to cover housing, energy and food bills. So, whether it’s a short-term squeeze on your finances or longer term, there may be some free support that could make a difference. 

Worried about your rent

If you’re worried about paying your rent, get in touch with your landlord. They may let you change the date you pay your rent so it’s after you get paid (if that doesn’t happen already), or agree to give you more time to pay your rent.

If your landlord won’t agree to you paying your rent debt over a longer period, contact organisations like Citizens Advice or Shelter for advice on your rights so you know where you stand. In Scotland, for example, landlords can’t raise the rent by more than 3% and there’s a limited ban on evictions until the  end of March 2024.

If you can’t pay your mortgage?

Contact your mortgage lender if you’re worried about missing a mortgage payment or if you’ve missed one or more already. If you have a mortgage adviser, talk to them before making any decisions about your mortgage.

There may be options that your mortgage lender can offer you to reduce your monthly payments. These include extending your mortgage term or switching from a repayment mortgage (where your monthly payments pay the interest and part of the original amount you borrowed, called the capital) to an interest-only mortgage (where your monthly payments cover the interest but do not repay the capital), for a limited period.

All mortgage lenders have agreed to offer a range of support for people who are worried about higher mortgage payments and most mortgage lenders (covering over 90% of the market) have signed up to a ‘mortgage charter’, which offers some extra support.

All lenders have agreed the following:

• Anyone worried about their mortgage repayments can contact their lender for help and guidance, without any negative effect on their credit file.
• If you are up-to-date with payments, you can switch to a new mortgage deal at the end of your existing fixed rate deal without another affordability check. This applies as long as you don’t want to borrow more, switch from, for example, a repayment mortgage to interest-only, or the other way round, or extend your mortgage term.
• Lenders will provide well-timed information to help customers plan ahead if their current rate is due to end.
• Lenders will offer tailored support for anyone struggling. This could mean extending the mortgage term to reduce your monthly payments or offering a switch to interest only payments. It could also include a range of other options like a temporary delay on your payments or letting you switch your mortgage to part interest-part repayment. The right option will depend on your circumstances.

Following meetings with the Chancellor in the summer, many of the mortgage lenders have agreed to a ‘mortgage charter’. This charter includes a range of measures designed to help people who may be worried about their mortgage.

These are on top of the measures explained above:

• If you’ve missed a mortgage payment, your mortgage lender will not force you to leave your home without your agreement for up to 12 months, except in exceptional circumstances.
• If you’re approaching the end of a fixed rate deal, you will have the chance to lock in a new deal up to six months ahead. You will also be able to ask for a better like-for like-deal with your lender right up until your new term starts.
• If you are up to date with your mortgage payments, you will be able to switch to interest-only payments for six months or extend your mortgage term to reduce your monthly payments. Your lender won’t need to carry out an affordability check and it won’t affect your credit score. If you want to go back to your original mortgage term, you will have to contact your lender within the six-month period.

Your lender can tell you whether or not they have signed up to the mortgage charter, or you can check on the Gov.uk website .

If you’re struggling, paying lower mortgage payments for a few months could help you get back on your feet financially, but you are likely to end up paying back your mortgage for longer and you could pay more interest overall.

Council Tax

If you’re worried about paying your Council Tax, the first step is to make sure you’re claiming all the discounts you’re entitled to. For example, you may be entitled to pay less or no Council Tax, if you are the only adult in the property or if you’re disabled or on a low income. Your council should tell you whether you qualify for any of these.

Contact your council if you’re struggling to pay your Council Tax. If you’re not behind with your payments but money is tight and you normally pay your bill by direct debit, the council may let you pay over 12 months, if you’ve chosen to pay over ten months.

If you miss a Council Tax payment, you should contact your council straightaway. The earlier you do that the more options may be available. The council may let you pay in smaller amounts through a payment plan. Don’t ignore letters from your council if you owe Council Tax, because they could go to court or send bailiffs to your home if you don’t pay what you owe.

Energy bills

The high price of energy has put extra pressure on household budgets and an increasing number of people are getting into arrears, but there may be support that could help you.

If you’re having difficulty paying your gas and electricity bills, speak to your energy supplier as soon as you can. There are rules in place that say they have to try to help you pay back what you owe. They should, for example, agree a payment plan with you to help spread the cost. You can also ask for more time to pay or a break in your payments.

There are also schemes to help you if you can’t afford to make your payments or if you’re on a prepayment meter and you can’t afford to top it up. Contact your energy provider as they will be able to tell you more about them.

Energy companies were banned from fitting prepayment meters for several months, and under new rules taking effect from November 8th, companies can't force someone to have a prepayment meter if, for example, they are aged 75 or over or have young children.

You can also find out more about what to do if you’re struggling with energy bills and what grants and benefits are available from energy suppliers on the Citizens Advice website.

Water bills

If you’re worried about your water bill, speak to your supplier as soon as you can. Many water companies run schemes which may be able to help you pay your bills. If you’re not already on a water meter, you may save money by having one fitted. Not everyone saves with a water meter, but it could be worth looking into. There’s a calculator on the Consumer Council for Water’s website that can help you work out whether you’ll save with a meter, or your water company should be able to tell you.

The WaterSure scheme limits water bills and is open to customers with a water meter who are on certain benefits as well as those who have a large family or a particular medical condition, which means they need to use more water.

Water companies also offer social tariffs, which could reduce the cost of a bill by up to 50%. The rules on who qualifies and how much help you get varies between suppliers, so check what yours offers. You can find out more about social tariffs and other help available on the Consumer Council for Water website.

Broadband and/or TV package

If you’re struggling to pay for your broadband, you may qualify for a low-cost social tariff, costing as little as £15 a month. This is normally available to people on Universal Credit, but some providers offer these cheap deals to people on other benefits as well. Social tariffs may not offer the same speeds as your current package, so check that you will be able to do what you need to do, before switching to one.

You can find out what your broadband provider offers by going onto the Ofcom website, or by talking to your supplier. If your supplier doesn’t offer a social tariff, you may be able to switch to one that does.

If you don’t qualify for a social tariff and can’t switch to another provider, or don’t want to, find out if there’s a cheaper deal available and if you can set up a payment plan to pay back what you owe.

Getting more help with arrears

If you have other debts or bills that you are struggling with, it’s a good idea to contact a free to use debt advice service, such as StepChange, Citizens Advice or National Debtline, which you can normally do online or by phone. They’ll be able to talk you through the best way to deal with your debt. If you’re in arrears on your mortgage, you should definitely get in touch with a debt advice charity straight away if your mortgage lender says it’s applying to court, you’ve been sent court papers for repossession or if you’ve been told that bailiffs are being sent to your home.

Sarah’s tip:

If you’re in arrears on your bills, the most important ones to pay are what’s called ‘priority debts’. These include payments like rent or mortgage, Council Tax, water and energy. That’s because the consequences of not paying could be very serious; for example, you could lose your home if you can’t pay your rent or mortgage.