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. All of this suggests that people from all walks of life are having to make changes to their spending in the light of the ongoing economic crisis, and that the cost of living is having a widespread impact all across the country.
Whilst some of us will be lucky enough to be able to ride out the storm by tightening our belts a little, many people will find that they really struggle during the next 18 months, and that their income does not keep up with their essential expenditure. If you or any of your employees are in that position, then there are some steps you can take to start managing your situation.
Firstly, you should make a list of the organisations that you need to make regular payments 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.
Next you should note down your income, and any savings or other assets that you have available on which to draw in an emergency. Comparing this with the cost of your bills will help you see whether or not you can cover all your commitments as interest rates and prices rise.
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 is legally obliged to 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.
If you or anyone you know are struggling to organise your personal finances, 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.