Wealth Check: The debt is now a drama and a film-maker wants to edit it out

The patient

As a self-employed film producer, Ben Butt, 28, is unable to rely on a stable salary.

He earns between £15,000 and £20,000 a year. "I'd obviously like to earn more," he says. "But I've only been freelance for about three years, so I'm building my experience and aim to increase my salary to around £30,000 next year."

But he also has to contend with debts totalling £11,700. He owes £2,000 on an Egg credit card with interest charged at an annual percentage rate of 16.9 per cent, and has an outstanding balance of £700 on a Barclaycard at 14.9 per cent APR.

On top of this, Ben has a £9,000 personal loan from Cahoot, used to help make ends meet, at a rate of 5.9 per cent. He pays £151 a month for this.

"I am paying off the minimum on all my debts," he says. "But it's something I really want to get rid of. I was considering going down the bankruptcy route just three months ago, but managed to just about get on top of things."

He divides his week between London and Brighton and rents a room in both cities, paying a total of £480 a month.

Despite his debts, Ben would like to get on the property ladder. "Next year I hope to get help with this by speaking to my parents – perhaps making a dual investment."

He is not paying into a pension and has no savings or protection policies.

The cure

Ben's priority should be reducing his debts, says our panel of independent financial advisers (IFAs).

Once this is dealt with, he needs to take action for his longer-term financial security by increasing his income and seeing where money can be saved.


Focus on paying off the most expensive debt first, says Adrian Kidd from IFA Mint Financial Services. "This is the credit card debt."

He could switch this to a card offering 0 per cent on balance transfers. Abbey's Mastercard has an attractive interest-free period of 13 months, although there is a 2.5 per cent balance-transfer fee.

It is common for pro- viders to charge this fee, and it needs to be weighed against the potential interest saved. In Ben's case, it is worthwhile, says Matthew Woodbridge from IFA Chelsea Financial Services.

However, he will still need to work at wiping out the debt, stresses Mr Kidd.

The rate on the Cahoot loan is competitive, but he must concentrate on repaying this as quickly as possible, adds Mr Wood- bridge. Drawing up a bud-get and sticking to it is vital.


Once his debts are cleared, Ben should look at taking out a tax-free individual savings account, comments Ian Hudson of IFA Hudson Green & Associates.

As a freelance, Ben must be sure to offset any expenses he incurs in his job, such as travel and equipment costs, against his tax bill. This will free up more spare cash for future savings.


When he is in a better position to do so, Mr Woodbridge recommends saving a deposit of around 5 per cent of a property's purchase price. This will allow him to qualify for more competitive interest rates.

But Brighton and London are two of the most expensive places in the UK to get a foot on the ladder, so he is wise to consider turning to his parents for help.


Ben has more pressing financial priorities than a pension, says Mr Hudson.

But after he pays off his debts, he should start saving 5 per cent of earnings into a stakeholder pension scheme – as he is self-employed and doesn't have access to a company plan.

Scottish Widows offers a stakeholder with low charges and a variety of funds to invest in.


As Ben has no dependants, there is no need for life cover. But, when possible, paying for an income protection policy may be worthwhile to provide a salary if he is unable to work due to long-term illness.

Independent Partners; request a free guide on NISAs from Hargreaves Lansdown

peopleFrankie Boyle responds to referendum result in characteristically offensive style
Harry Redknapp. Mark Hughes and Ryan Shawcross
footballNews and updates as Queens Park Rangers host the Potters
Arts and Entertainment
tvHighs and lows of the cast's careers since 2004
New Articles
Life and Style
Couples have been having sex less in 2014, according to a new survey
Arts and Entertainment
'New Tricks' star Dennis Waterman is departing from the show after he completes filming on two more episodes
tvHe is only remaining member of original cast
New Articles
i100... with this review
Holly's review of Peterborough's Pizza Express quickly went viral on social media
New Articles
Arts and Entertainment
musicHow female vocalists are now writing their own hits
Arts and Entertainment
musicBiographer Hunter Davies has collected nearly a hundred original manuscripts
Finacial products from our partners
Property search
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    Senior BA - Motor and Home Insurance

    £400 - £450 Per Day: Clearwater People Solutions Ltd: **URGENT CONTRACT ROLE**...

    Market Risk & Control Manager

    Up to £100k or £450p/d: Saxton Leigh: My client is a leading commodities tradi...

    SQL Developer - Watford/NW London - £320 - £330 p/d - 6 months

    £320 - £330 per day: Ashdown Group: The Ashdown Group have been engaged by a l...

    Head of Audit

    To £75,000 + Pension + Benefits + Bonus: Saxton Leigh: My client is looking f...

    Day In a Page

    Scottish referendum: The Yes vote was the love that dared speak its name, but it was not to be

    Despite the result, this is the end of the status quo

    Boyd Tonkin on the fall-out from the Scottish referendum
    Manolo Blahnik: The high priest of heels talks flats, Englishness, and why he loves Mary Beard

    Manolo Blahnik: Flats, Englishness, and Mary Beard

    The shoe designer who has been dubbed 'the patron saint of the stiletto'
    The Beatles biographer reveals exclusive original manuscripts of some of the best pop songs ever written

    Scrambled eggs and LSD

    Behind The Beatles' lyrics - thanks to Hunter Davis's original manuscript copies
    'Normcore' fashion: Blending in is the new standing out in latest catwalk non-trend

    'Normcore': Blending in is the new standing out

    Just when fashion was in grave danger of running out of trends, it only went and invented the non-trend. Rebecca Gonsalves investigates
    Dance’s new leading ladies fight back: How female vocalists are now writing their own hits

    New leading ladies of dance fight back

    How female vocalists are now writing their own hits
    Mystery of the Ground Zero wedding photo

    A shot in the dark

    Mystery of the wedding photo from Ground Zero
    His life, the universe and everything

    His life, the universe and everything

    New biography sheds light on comic genius of Douglas Adams
    Save us from small screen superheroes

    Save us from small screen superheroes

    Shows like Agents of S.H.I.E.L.D are little more than marketing tools
    Reach for the skies

    Reach for the skies

    From pools to football pitches, rooftop living is looking up
    These are the 12 best hotel spas in the UK

    12 best hotel spas in the UK

    Some hotels go all out on facilities; others stand out for the sheer quality of treatments
    These Iranian-controlled Shia militias used to specialise in killing American soldiers. Now they are fighting Isis, backed up by US airstrikes

    Widespread fear of Isis is producing strange bedfellows

    Iranian-controlled Shia militias that used to kill American soldiers are now fighting Isis, helped by US airstrikes
    Topshop goes part Athena poster, part last spring Prada

    Topshop goes part Athena poster, part last spring Prada

    Shoppers don't come to Topshop for the unique
    How to make a Lego masterpiece

    How to make a Lego masterpiece

    Toy breaks out of the nursery and heads for the gallery
    Meet the ‘Endies’ – city dwellers who are too poor to have fun

    Meet the ‘Endies’ – city dwellers who are too poor to have fun

    Urbanites are cursed with an acronym pointing to Employed but No Disposable Income or Savings
    Paisley’s decision to make peace with IRA enemies might remind the Arabs of Sadat

    Ian Paisley’s decision to make peace with his IRA enemies

    His Save Ulster from Sodomy campaign would surely have been supported by many a Sunni imam