What support is available to ease the strain of dealing with debts?

With Debt Awareness Week running from March 18 to 24, here is a look at the impact of financial problems and where you could get help.

March marks the 10th anniversary of Debt Awareness Week (Alamy/PA)

Debt problems aren’t just a financial issue – they can have wide-ranging impacts, sometimes affecting people’s mental wellbeing, as well as putting a strain on their relationships.

Hiding struggles with debt can also make the issue worse, and with the 10th anniversary of Debt Awareness Week (March 18 to 24) on the horizon, it’s important to know what support is available.

Last year, StepChange Debt Charity says it received 620,000 contacts and supported over 180,000 people with full debt advice.

Debt problems often come to a head at the start of the year – and in January alone, StepChange provided full debt advice to over 19,000 new clients – the highest number it has recorded since before the pandemic.

While some people may have been tipped into debt by a particular event, such as a job loss, the everyday struggle with living costs is a common theme seen by the charity.

Nearly a quarter (23%) of StepChange clients cite the increased cost-of-living as their reason for facing financial difficulties.

The average debt held by StepChange clients is just under £15,000. Those struggling with energy bills have just over £2,000-worth of energy arrears, on average.

The findings echo YouGov research in January commissioned by charity Christians Against Poverty, which found one in 11 (9%) of UK adults had been mainly using credit in the previous six months to cover monthly bills.

The fact is you're not alone

Simon Trevethick, StepChange Debt Charity

Simon Trevethick, head of communications at StepChange, says: “The rising cost-of-living does not discriminate and people right across Britain are facing the squeeze as rents rise, mortgage costs increase, and the price of everyday essentials grows.

“This Debt Awareness Week, we want to address some of the barriers which may stand in the way of people accessing free debt advice when they need it.

“Whether it’s stigma or embarrassment, mental health issues, lacking time or worrying about the impact on future finances, there are a myriad of reasons why people may be hesitant to get help if they’re in a tight spot with their finances.

“However, the fact is you’re not alone, and free and impartial debt advice is there to support you regardless of your circumstances or how your debt came about.”

Trevethick says StepChange clients can do their whole debt advice session online, with advisers also available over the phone if needed.

He adds: “Getting free debt advice will involve an expert look at your finances, with a recommendation of how to get back on track. You’ll set up a full monthly budget that will take a detailed look at your finances, and will be advised on the most sustainable way forward to deal with your debts. Taking that first step can be difficult, but it doesn’t have to be.”

For some people, debt can interact with mental health issues, making problems even worse.

Conor D’Arcy, interim chief executive of the Money and Mental Health Policy Institute, a charity founded by consumer champion Martin Lewis, explains: “Debt problems and poor mental health are closely linked. One can exacerbate the other, creating a really vicious cycle.”

For those struggling with your mental health, D’Arcy says, “It can be hard to do the basics in life, never mind trying to figure out what to do about your debt or speaking to someone about it.

“Mental health problems can also make it much more difficult to earn money, to stay on top of bills, and reach out for help.”

But D’Arcy emphasises: “If you are struggling with your mental health and debt problems, it’s important to know that you are absolutely not alone. There is no debt problem that is unsolvable with the right support.

“Charities like StepChange and Citizens Advice offer free debt advice. Similarly, if you’re struggling with your mental health, there is help out there.

“The Samaritans are always there to listen if you’d like to chat to someone about how you’re feeling, and you can find helpful advice on the Mind or NHS website.”

It could also be worth visiting Help for Households to make sure you’re receiving all the help you’re entitled to.

Some people may find budgeting tools, such as those on the MoneyHelper website, helpful.

Shifting debts onto a 0% balance transfer card may also be useful in some cases, depending on individual circumstances.

If gambling is an issue, many banks have tools that enable customers to restrict spending.

Support is also on hand from lenders. If you have credit card or personal loan problems, support may include making reduced payments for a short period, in cases where your circumstances are expected to improve, or while you seek debt advice.

Or, if difficulties are more severe, a lender may agree to an affordable payment plan to repay the debt over a longer period. Potential options will depend on individual circumstances.

Your lender will explain what the support offered means before it is applied to your account. This will include how costs and charges will be dealt with and how any arrangement will be reflected on your credit file.

Don’t just cancel direct debits without speaking to your lender, as missed payments could impact your credit score.

Eric Leenders, managing director of personal finance at UK Finance, says: “We know that rising bills and other costs are having a real impact on people’s finances, and worrying about or falling into debt can be really stressful.

“If you think your credit card or loan repayments are unmanageable, contact your lender as soon as you can. There’s no need to wait until you’ve missed a payment as they’re ready to help, even if all of your payments are up to date.

“The earlier you make contact, the more options they’ll have to find what works for you and the sooner they’ll be able to help.”