MONEY MATTERS: Sorting your debts

Debts can be put into two categories – priority and non-priority. If you have both priority and non-priority debts, it is vital that you deal with the priority debts first.

A priority debt is a debt that means you would lose something if you did not pay it. Rent or mortgage payments are an example of a priority debt because if you do not pay this you are at threat of eviction or repossession of your property.

If you don’t pay your gas or electricity bill within 28 days, your energy supply could be cut off. However, it can’t be cut off without notice and your gas or energy company must send you a warning letter. If you’re having difficulty paying your gas or electricity bills, tell your supplier as soon as possible. You may be able to work out a payment plan or install a pre-payment meter.

At Rotherham Council there is a money advice team that provides money and debt advice. Some of the people the team help are in financial distress with debts that have built up over time and have become unmanageable. They provide advice to deal with immediate problems, as well as providing longer term support to make money and debt manageable in the future.

Whether you’ve fallen into debt through rent arrears, credit card loans or household bills, the team can provide a tailored solution to help maximise income and minimise debt. No matter how small your worry, things can escalate very quickly, and my advice is always to seek help early, before things get out of hand.

For free, impartial advice contact the team on 01709 255526 or via email on [email protected]

Don’t forget, Rotherham Council is currently offering a payment of up to £400 to local households struggling to meet the costs of their energy bills because of the significant rise in costs. This support payment is called the Energy Crisis Support Scheme and requires you to complete a form online to assess your eligibility. To complete the form online visit www.rotherham.gov.uk and search for ‘Energy Crisis Support Scheme’.

If you’re on a low income, you might qualify for a Government-backed scheme called Help to Save. It’s a type of savings account that gives a bonus of 50p for every £1 you save over four years. You can save between £1 and £50 each calendar month. You do not have to pay money in every month. For more information please visit https://www.gov.uk/get-help-savings-low-income

Who can take part in Help to Save?

If you live in the UK, you can open a Help to Save account if one of the following applies:

1) You’re getting Working Tax Credit

2) You’re entitled to Working Tax Credit and are getting Child Tax Credit

3) You’re claiming Universal Credit and your household earned £617.73 or more from paid work in your last monthly assessment period

Generally, it makes far more financial sense to pay off debts than to save. It might feel good to pay £100 into your savings account, but when you are paying a lot more interest on your debts than you can earn saving, you will save in the long run paying down an outstanding credit card balance.

Please seek financial advice if you are ever unsure of what to do with your finances.