The Dread of Debt: Regaining Control of Your Finances

The UK consumer credit lending market demonstrated an increase in the amount of outstanding debt of approximately £9.9 billion over a two-year period between the end of 2017 and December 2019. To put this into context, this is just shy of two billion £5 notes. When you look at the repercussions of personal debt, 350 people are declared insolvent ant bankrupt every day of the year.

In June 2019, the total debt owed by consumers in the UK was estimated to be as much as £1.637 trillion. When this figure is broken down and compared to personal income, the average debt per adult was £31,232, or 112% of average UK earnings. Based on these figures, and taking other monthly expenditure into account, the average time to pay back an average credit card debt with the average rate of interest on the minimum monthly repayment would be 26 years and 9 months!

When you look at the figures behind the big-picture statistics, you can see that the average interest on these UK figures was £967, or 3.5% of the UK average earnings. This is the proportion of anyone’s salary in interest rates alone.

Consumers now face constant pressure from advertising and our ‘need-to-have’ culture. It’s sadly inevitable that many individuals find themselves in situations where expenditure massively exceeds income and creates this deficit that we call debt. Our article on the pressures of consumer society (Available HERE) investigated this within the context of teenagers and young adults, but the message remains universal.

There is however a light at the end of the tunnel. As consumers, we can gain a greater understanding of our financial situation and consider the areas where changes can be implemented. This offers an opportunity to improve our financial circumstances and move forward to a more stable financial position.

The way to do this is threefold; Assessing the debts that we currently have; Looking at the ways in which we can increase income and; Understanding the areas of our spending that we can make changes and reduce our outgoings.

Assess the debt

Organising all the relevant information into an order that lets us paint a comprehensive picture of our actual current financial situation is the first step in doing this.

Obtaining a copy of your credit report can assist in collating the details of what you owe and offer an overview of your financial standing. Remember to also consider debts that haven’t been reported to credit reference agencies. You may find these in your emails or personal documentation.

Make a list of all the people or companies that you owe money to and BE HONEST! If you remain honest and maintain an accurate view of your debts, it will offer a light at the end of the tunnel. Equally, you should also consider situations where payment information seems incorrect or out of date. This may include additional payments you have made which have not been registered. Effective record keeping will allow you to be more resolute with companies when tackling discrepancies and challenging anything that you consider to be incorrect.

Deal with priority debts such as mortgage, rent or council tax payments and utilities first. These are the debts that can potentially lead to legal action and threats of eviction or repossession from landlords/lenders.

Maximise income

Assessing your financial situation also means looking at your income and assessing whether there are additional measures you can take to increase your income. We all live in the real world, and as such, we all understand that it is not always possible to seek overtime or additional contract hours at work. There are three main areas of income that you can review when attempting to increase your income –

Salary – Consider whether you can obtain overtime on a short-term basis. Be realistic – this is not always practical or possible.

Benefits – Are you entitled to additional benefits that you are not currently receiving? You can assess your entitlement to benefits in various places. Our experienced debt advisers can run through a full assessment of your finances.

Other Income – Alternative measures to increase income are also possible, such as renting out a spare room on Airbnb or to a permanent lodger. There are considerations that must be made in these circumstances, such as ensuring that you are not in breach of tenancy, mortgage or home insurance agreements. Always consider the potential loss of council tax discount or an increase in income tax due to changes in your living situation or income.

Reduce Expenditure

The most effective way to reduce expenditure is to evaluate your costs and break them down to outgoings on a monthly basis. By factoring in expenses for birthdays and Christmas presents, including any property maintenance such as gutter and window cleaning, you can help to avoid any unexpected outgoings.

Household costs – Budgeting for household items and repairs in advance can help mitigate unexpected costs further down the line. Calculating an approximate monthly cost for household repairs etc can help you put money aside for larger purchases.

Plan meals – Planning meals and shopping around for items that could potentially cost less elsewhere can help you save a considerable sum throughout the course of the year. Food waste not only costs consumers money but is also increases our carbon footprint. In our December article (Available HERE), we discussed food waste over the festive period (but these principles are applicable throughout the year).

Cancel unused/non-essential subscriptions – In 2020, much of our entertainment comes from subscriptions to multi-channel TV platforms, savings websites and other products or services. It is possible to make considerable savings on subscriptions by reading through bank statements and reviewing whether it is necessary to continue to subscribe to certain services. Many TV streaming services offer free trials, which may be an alternative to more expensive, existing contracts. Another area where we often overspend is on gym memberships. Consider the cost per visit by taking the monthly fee and dividing it by the average number of visits. You may find the average cost surprising if you only use the gym once or twice a month. Our article on gym memberships highlights the benefits of shopping around and not overstretching yourself financially (Available HERE).

Financial products and suitability – Home and life insurance are invaluable for when we need them. However, sometimes more cost-effective alternatives to the existing companies that we use are out there. It is beneficial to shop around and ensure you are covered for what you need. There are many comparison sites out there that offer the chance to compare prices and benefits of most products.

Energy costs – This is one of the biggest areas in which massive savings can be made. There is a multitude of things that can reduce the amount spent on electricity and gas. By remaining conscious of things around the home such as switching lights off when not in use, only boiling the kettle for what is needed and switching the central heating down a few degrees, we can all help to save the planet as well as some money. Our article on reducing energy costs is available HERE).

There are options for financial help with home energy improvements. This includes things such as cavity wall insulation, cladding and upgrades to boilers and central heating.

The installation of smart meters to track energy usage more accurately or providing regular meter readings to your energy supplier(s), can ensure that your monthly payments reflect your consumption and aren’t calculated from estimates.

Council Tax – There are many opportunities for discounts on council tax from local authorities if you qualify for certain benefits. Up to 25% can be deducted from your council tax bill if you are the only occupant under ‘single person discount’. Many local authorities provide exemption for students of up to 100% for council tax.

It is worthwhile enquiring with your local authority Revenue and Benefits or Finance departments to see if you are entitled to any of these reductions. understand that evaluating your finances can be a massive task and one that can be upsetting and stressful. We have put together our top tips for consumers with concerns about their finances to help you get back on track –

  • Assess the debt – Make a list of anyone you owe money to and the exact amount owed. Be honest and challenge anything that you do not agree with.
  • Research maximising income – Consider the realistic options that may be available to maximise your income. This could be additional hours or overtime at work, assessing your benefit entitlements or renting out space in your home (assuming that insurance, mortgage, rental agreements and taxes allow).
  • Try to reduce expenditure – There are several areas where it may be possible to reduce your outgoings, including household shopping, energy costs and the cancellation of unused or non-essential subscriptions. Shop around. You never know what you could save!
  • Be realistic – Understand the areas where you could make subtle or sustainable changes and set realistic expectations.
  • Negotiation is key – Many companies are actually willing to negotiate on payment terms. This may include freezing interest rates or accepting reductions on the amount owed. Negotiating with companies about what is owed can negate the need for debt collector involvement and reduce the amount paid in the long term.


Free, practical advice is available for anyone who thinks that their financial situation requires attention. By tackling issues head-on, we can assess where we are, where we need to get to and how we are going to do it. You can get independent and practical debt advice by calling one of our experienced Debt Advisers(Open 9am-5pm, Monday-Friday).

If you would like more advice or guidance on any consumer matter, you can contact on 0808 164 6000. We are open 9am-5pm, Monday-Friday. You can follow us on social media – Twitter: @advicedotscot and Facebook at, Instagram:, or get ahead by visiting our knowledge centre at