Dealing with the rising costs of living

Retail sales fell steeply in August as the rising cost of living put pressure on households, figures show. According to the Office for National Statistics (ONS), sales fell by 1.6% which is much larger than economists predicted, continuing a fall since the summer of 2021.

Retail sales in all the main sectors - food, non-food, online and fuel - fell over the month and supermarkets' sales volumes fell by 0.9% in August. However, alcohol and tobacco sales rose by 6.3%. August's sales figures signalled the largest month-on-month drop since December 2021.

If you are struggling with your finances, there are some steps you can take to start managing your situation. Make a list of the organisations that you need to make a payment to. 

Note down how much you pay and whether you are behind on any payments. This includes essential household bills such as electricity and gas, as well as loans and any other debts or repayments you have.

If you find this too difficult, a debt adviser can help you for free.

The MoneyHelper Debt Advice Locator tool can help you find out where to access free debt advice near you.

It’s important that you prioritise your debts. Some debts will be more urgent than others because the consequences of not paying them can be more serious. These may include:

●      Mortgage or rent 

●      Council tax/rates 

●      Gas or electricity bills

MoneyHelper has useful information on how to prioritise your debts.

Once you know which debts are a priority, you can work out a budget.

This will help you understand how much money you have to pay your commitments as you go forward.  

You might want to use a budget tool, such as the MoneyHelper online budget planner, or a tool provided by a debt adviser to help you.

If you are worried about not being able to make future payments, it is important to contact the organisations you make payments to and let them know. They may be able to talk to you about options for changing how or when you pay.

If you are finding it difficult to pay your mortgage, credit card or personal loan, your lender should provide you with support tailored to your individual circumstances. This support will be available if you’re struggling for the first time or if you’ve already had help.   

Your options could include: 

●      Making reduced payments for a temporary period.

●      Changing your mortgage or loan term to make your payments more affordable.

●      Making no payments for a temporary period.

●      Being directed to sources of free debt advice.

Contact your lender as soon as possible if you’re finding it difficult to make payments.  

Just talking to your lender will not affect your credit file, and they can help you. If you agree on an arrangement with them, that will be reflected on your file, but this would also be the case with any missed payments.

If your lender is not treating you fairly, you have the right to complain directly to them. If you aren’t satisfied with their response, you can contact the Financial Ombudsman Service.

See: Dealing with the financial impact of rising costs of living | FCA