UK Consumers Reaching Record Debt. Controlling Your Finances Is The Solution

UK consumers are being hit from multiple angles on price increases. Rises in tax, VAT, utilities, fuel, alcohol and food mean more and more households are getting into debt to meet the demands of monthly expenses. Debts from credit and store card bills, as well as short term loans are increasing. The solution may lie in critically evaluating all of the monthly outgoings and find anything that can be deemed unnecessary.

Unnecessary Expenditures is one of the main causes of running into debt. There are some luxuries that we just don’t want to give up on, but some personal cutbacks might be essential to avoid increasing debt.

Insulating your home by fitting extra loft insulation, modern rugs, and double glazed windows will help reduce the heating bills substantially. However, installing such insulation can be quite expensive. The savings on utility bills would not be worth the insulation if it means you will be in debt from making these modifications. This solution is only viable if you can afford the process now, and will reap the long term benefits of the reduced bills.

Comparing Tariffs on gas and electricity providers is a good way of cutting expenses. Energy prices are rapidly increasing but in the UK, there is still a highly competitive market. Energy companies are still offering deals and fixed price deals may be a wise long term decision when choosing a provider. The government has recently announced legislation that will obligate energy companies to provide consumers with their lowest tariffs. This will make it easier for the average household as the energy market is now much simpler to shop around.

Cutting down or switching brands at the supermarket. Food is essential for living, but money can be saved by buying the equivalent store brand or off brand products instead of the name brands. Name brand products are often the best products on offer in a supermarket, but store brand products or off brand products in the case of shopping at Lidl or Aldi can be just as good, sometimes better than buying the respective name brand product and can save you money at the till.

Investing in High-Interest Saving Accounts are a good way of preparing for unexpected expenditures. Investing in Cash ISAs can currently return up to 2.8% on investment and can be opened with as little investment as £1. Shopping around for the best rates and deals is a necessity in order to protect your money and make it work best for what you need it to do. Investment ISAs and Fixed Rate Bonds are also available, but are only favourable to the high sum investor.