Expert advice on the cost-of-living crisis

An interview with Step Change

Money worries have been on the minds of many at the moment, as people across the UK face financial hardships of the cost-of-living crisis. At Health Assured, we've seen an 82% increase in financial-related calls in comparison with this time last year.

And this figure is hardly a surprise, as energy bills increased by an average of £700 a year, with another rise due in October. The cost-of-living crisis means we’re paying more for energy, transport, food, rent, fuel, council tax and National Insurance.

Times are uncertain, and many people are finding that pay increases, benefit payments and support initiatives aren’t enough to match soaring price rises. 

With no sign of inflation reducing any time soon, it looks like we’re set for further challenges ahead. But remember, you don’t need to navigate this uncertainty alone.

Support is out there. Many services are available to help you keep on track, avoid debt and cope with the stress you might be feeling right now. Here at Health Assured, we’re passionate about helping people through this difficult financial period. We know the impact money can have on other areas of life, including your emotional wellbeing and relationships. It’s so much more than a bank balance. 

So this is why we’ve partnered with StepChange Debt Charity to get some expert advice on what to do if you’re struggling.

In the interview below, we speak to Andy Shaw, an expert Debt Advice Policy Officer at StepChange. We asked Andy to shed some light on some of the most common cost-of-living questions we receive via the helpline, and here’s what he had to say…

1) What should I be considering or reviewing now that the cost of living crisis is affecting me?

“The most important thing is to understand your financial situation so you can see what action you need to take.

The first step is usually to create a budget. Make a list of all your income and everything you spend your money on, on a weekly or monthly basis. As well as essentials like food, rent, fuel and travel costs, don’t forget occasional expenses like clothing, footwear and repair and maintenance costs for your home. You might not pay these every month, but factoring them in is vital to get a proper understanding of your finances.

Once you’ve established your financial position, you can see where there might be a problem – are you paying out too much in bank charges, for example, or debt repayments?

Sometimes it’s a case of taking a few straightforward steps to improve your financial position, like cancelling unwanted subscriptions or checking for a better value phone contract. Sometimes, the problem will be bigger, and there aren’t any quick fixes for your situation. This could be a sign that you need debt advice.”

2) I feel overwhelmed trying to understand my finances, what should I do?

“Creating a budget doesn’t have to be complicated, and there are a lot of free apps and websites out there that will help make it much easier for you. However, if you’re still struggling, you could consider getting free debt advice. An advisor will help you understand your finances before they recommend a way of dealing with your money worries.”

3) I’m struggling with my debt already and things are now worse, what would you suggest?

“If this is your position then it’s important to get advice. Common warning signs include your credit card balances increasing every month, only making minimum payments on your credit cards or other debts, constantly living in your overdraft, or struggling to cover the interest and charges on your debts. Even if you haven’t missed any payments, you can still get help before things start to get worse.

Whether you use our online advice tool or call us, the process is the same. A debt advisor will review your position and recommend the best way forward for you. That might be some kind of plan to help pay down your debt in a structured way, or if your debts are unaffordable then they will be able to discuss ways of writing them off. There are all kinds of different options depending on your exact situation, but the biggest step is contacting a debt advisor in the first place. They will help you take back control of your finances.”

4) Is the government helping with anything?

“The Government has promised various measures to help people with the cost-of-living crisis. Every household will receive a £400 credit to their energy bills this autumn, which will help offset some of the price rise /anticipated this winter. In addition, further direct payments will be made to many households to support them with the cost of living:

• Households in receipt of means-tested benefits, such as universal credit, will receive £650
• Households in receipt of disability benefits, such as Personal Independence Payments (PIP), will receive £150
• Households with pensioners will receive an enhanced Warm Home Discount this winter, worth £300

You can receive more than one of these payments. So, for example, if you’re a pensioner in receipt of disability benefits, you’ll receive both the £150 disability payment and the £300 Warm Home Discount.”

5) Where can I get more help?

“In addition to the government help outlined above, local councils have also been given an additional £500m as part of their household support fund. Local authorities can use this money as they see fit to support households in financial difficulty. Some may provide food and fuel vouchers, for example, as well as grants to cover one-off expenses like replacement white goods. The exact amount of support you’re entitled to, and the precise eligibility criteria, will vary between local authorities, so you’ll need to check with your council to understand what kind of help you can get in your area.”

6) As an employer, how can I support employees more? 

“Last year, over half of StepChange’s new clients or their partners were in work, which shows just how important it is for employers to ask themselves how employees will cope should they face financial difficulty.

What an effective wellbeing strategy looks like will differ depending on the organisation. It can range from measures as simple as signposting to free financial advice or mental health support, to those giving staff courses on mental health first aid or using an employee assistance program through a healthcare provider. What’s clear is that an up-to-date strategy for supporting employees’ mental and physical wellbeing is going to be key to helping them navigate the post-pandemic era, the cost-of-living crisis and beyond.”

As the UK’s leading debt advice provider, StepChange helps hundreds of thousands of people every year to take back control of their finances. The charity has nearly 30 years of experience providing free debt advice, with expert advisors offering practical help and debt solutions.

Health Assured is here for you. Our counsellors and financial team can help you overcome any money troubles you might be facing. We support hundreds and thousands of people each year, offering a listening ear and handy guidance when people need it most.

For more information, read our blog: cost of living increase: managing money worries