Bills: What to do if you can't pay them

Distressed old age hispanic female checks bills in home office
Bills have never been higher and many of us are concerned about how we're going to pay them. (Getty Images)

You’re not the only one feeling the squeeze just now. Across the country, almost a quarter of people said it is currently difficult or very difficult to pay their bills just now due to the cost of living crisis.

In some parts of the UK, that rises to a third of all people already struggling.

And this is something that might get worse as the cost of living crunch goes on. Around 16m British people who need to borrow money if they had to pay an unexpected bill of £300, according to PwC.

So if you suddenly find it's a struggle to meet one of your essential household bills then what are your rights? How can you ask for time or negotiate some help?

Here’s what you need to know.

Don’t ignore it

This is the most important tip you will read if you’re struggling. When times are tough it’s easy to simply stop opening the envelopes, stop answering the phone and even stop answering the door if you’re worried it might be connected to money you owe.

But this will not stop the problem getting worse and it could have a serious impact on your mental health too. Money worries can be incredibly stressful and the pressure of unpaid bills, especially if the situation escalates, can cause real harm to your health.

A pile of envelopes with delivery stamps saying balance overdue symbolizing bills and debt on an isolated white background
It's tempting to ignore bills but they won't go away and need to be dealt with. You'll feel better for it. (Getty Images)

Read more: 8 smart ways to cut your energy bills

Maybe this is the first bill you can’t pay or maybe you’ve been struggling for a while and owe a lot of money. Whatever your situation, it will only start to get better once you address it head on.

It’s hard but it only gets harder if you leave it.

Contact the company

Whether it’s your mobile phone or your mobile dog groomer, you should contact the company you owe money to as soon as possible once you realise it might be a struggle to pay.

No one likes to make a phone-call like that but you certainly won’t be the only one. More importantly, your provider is likely to have a system in place to help struggling customers.

That might mean a freeze on new charges, a payment plan, a discussion of whether there is a cheaper service they can move you to.

Read more: 22 cost-cutting tips

But even if they don’t have a better outcome to offer to you, at least discussing it with them will mean you know what their process is if you fail to pay your bill on time.

Grasp that nettle and pick up the phone.

Watch now: Energy bills suppliers face crackdown for raising direct debits

Work out your priority bills

Any unpaid bill has the potential to cause you problems and you shouldn’t ignore any. But some debts and bills need to be made a priority as failing to pay them can cause you significant difficulties very quickly.

Rent, your mortgage and any loans secured against your home need to be prioritised as failing to pay those puts your actual home at risk.

Then council tax, energy bills, child maintenance, CCJ payments, TV licence and any money owed to HMRC also needs to be dealt with first – simply because the consequences for missing those can be so severe.

No-priority debts are things like store cards, credit cards and other unsecured debts.

Work out your budget

This is the single most useful thing you can do to help your finances. By drawing up a list of your regular bills and costs, and comparing it to your income, you can work out where you are financially each month.

That means that you can see exactly how much spare income you have to use to clear old debts and manage day-to-day living expenses. It also means that you can clearly see if your income is not enough to help you manage your rising bills with a bit of care. And if it isn’t then you need to act.

Read more: Mum saves £300 on monthly food shop thanks to savvy shopping

That may mean cutting back on non-essentials but until you really look at what you spend, you won’t know what you have.

Shot of a young couple going through bills and paperwork at home
Get budgeting and. you'll soon know where you stand with your bills, income and overall finances. (Getty Images)

Increase your income

Many people in the UK don’t claim the full amount of help that they are entitled to and that’s a real issue in a cost of living crisis.

You may qualify for Universal Credit support or other grants and allowances and be missing out on a part of your income each month. Try online benefit calculators from charities like Turn 2 Us and EntitledTo and check you’re not missing out.

After that, you could look for ways to boost your income. For example, if you have a spare room then you could consider letting it out. Under the Rent A Room scheme there’s no tax to pay on up to £7,500 a year paid to you in rent.

Perhaps you could increase your hours at work or take on a few evening shifts. It’s not ideal but these tough times are likely to carry on for at least this year and you may need to take dramatic steps to protect yourself from debt.

Read more: How to make money

Get some help

Perhaps you’ve done all this and you still cannot afford your rising bills. Again, you will not be the only person in this position, particularly as energy bills start to jump.

If you can’t make the sums work then you might need to seek out some targeted support. One way to try this is through a charity like Citizens Advice or Stepchange but it may be hard to make an appointment as lots of people want to access that kind of help.

Perhaps there is a grant you could apply for, Turn2Us has a good search tool so you can find out what’s available to you.

Look around at what local help there may be in your area, from grassroots charities to credit unions. You’re not the only person struggling and you don’t have to struggle on your own.