The cost of living crisis has hit hard. Rising food prices, soaring energy bills, and higher rents mean many people are struggling to make ends meet.
If you’re finding it tough to keep up with debt repayments, you’re not alone.
The good news? There’s help available.
Whether it’s government assistance, charities, or financial products, you have options.
Here are five debt relief options every Brit should know about.
1. Breathing Space Scheme (Debt respite scheme)
If you’re feeling overwhelmed by debt, the Breathing Space Scheme can give you a break.
This government initiative provides 60 days of protection from interest, fees, and enforcement action by creditors.
There are two types of breathing space:
- Standard breathing space: Gives temporary relief from creditors while you seek advice.
- Mental health crisis breathing space: Offers extended protection for those receiving NHS mental health crisis treatment.
To apply, you’ll need to speak to a debt advice provider such as StepChange or Citizens Advice.
It won’t wipe your debts, but it gives you time to get a plan in place.
2. Debt Management Plans (DMPs)
If you can’t afford your monthly repayments, a Debt Management Plancould help.
A DMP allows you to pay off debts at a more manageable rate.
A debt charity or provider like StepChange or PayPlan will work with you to negotiate lower payments with your creditors.
In most cases, they can stop interest and charges being added.
DMPs are informal agreements, meaning they’re flexible. But they don’t cover secured debts like mortgages or car finance.
3. Individual Voluntary Arrangements (IVAs)
An Individual Voluntary Arrangementis a formal debt solution for those with more serious debt problems.
It lets you make reduced monthly payments for five to six years. After that, any remaining debt is written off.
An IVA needs to be set up by an insolvency practitioner, and creditors must agree to the terms.
It can provide relief, but there are drawbacks:
- It can affect your credit rating.
- You might need to release equity if you own a home.
- If you don’t keep up with payments, you could be forced into bankruptcy.
IVAs work best for those with debts over £10,000 and a stable income.
4. Debt Relief Orders (DROs)
If you have little income and no assets, a Debt Relief Ordercould be an option.
It’s a low-cost alternative to bankruptcy for debts under £30,000 (in England and Wales; different limits apply in Northern Ireland).
To qualify for a DRO, you must:
- Have less than £75 disposable income per month.
- Not own a home.
- Have assets worth less than £2,000.
A DRO pauses your debt repayments for a year. If your financial situation hasn’t improved by the end, your debts are wiped.
You’ll need to apply through an approved debt adviser.
5. Government and charity support
Many people don’t realise how much help is out there.
If you’re struggling with everyday costs, these organisations can help:
- Citizens Advice – Free guidance on debt, benefits, and budgeting.
- StepChange – Expert debt advice and tailored repayment plans.
- Turn2Us – Helps people find grants and financial support.
- National Debtline – Offers free, confidential advice.
You may also be eligible for government benefits such as:
- Universal Credit – Financial support for those on low income.
- Council Tax Reduction – Discounts based on income and circumstances.
- Warm Home Discount – A rebate on energy bills for eligible households.
- Discretionary Housing Payments (DHPs) – Extra help for rent payments.
It’s worth checking gov.uk to see what you might qualify for.
Cost of living debt relief
Debt can feel overwhelming, but you don’t have to face it alone. From Breathing Space to DROs, there are real solutions that can help you regain control.
Start by talking to a free debt advice charity. They can guide you towards the best option based on your circumstances.
The sooner you act, the more choices you’ll have.
Remember, financial struggles don’t define you. Support is available, and brighter days are ahead!
