Ten top tips to survive the recession - In England

The effects of the recession can be devastating for you and your family. You may lose your job or be asked to go on short-time working. You may be struggling to keep your home. Older people living on their savings have seen prices soar whilst their income decreases. Your debt problems may seem out of control. But however the economic situation may be affecting you, there are ways to help yourself and there are organisations that can help you cope if you are struggling. Here are some simple tips to help you get on top of things.

1. Don't bury your head in the sand

Ignoring a problem will only make it worse. Don’t ignore calls or letters from anyone you owe money to (your creditors). Contact them to explain why you’re having problems. The sooner you do this, the more options you'll have for solving your financial problems.

For more information about dealing with debt in England, Wales and Northern Ireland,see Help with debt and in Scotland, see Help with debt.

2. Get advice

There are many organisations which offer free and independent advice such as Citizens Advice, Shelter, National Debtline and the Consumer Credit Counselling Service. Their advisers can assess your situation and work out the best course of action for you.

For the websites of useful organisations, go to Further help.

3. Pay your priority debts first

If you have debts, there are some you need to pay first before others, because the consequences of not paying them can be much more serious. For example, mortgage or rent debts are a priority because if you don’t pay these, you could lose your home. Debt advisers can help you plan your budget and pay your priority debts first.

For more information about dealing with debt in England, Wales and Northern Ireland, see Help with debt and in Scotland, see Help with debt.

4. Work out a budget

Work out how much money you've got coming in and going out of your household on essential expenses like food, bills and travel to work. In England, Wales and Scotland, you can download a budget form to help you do this. Check to see if you can save money on your bills and whether you are claiming all your benefits (see below).

When you've drawn up your budget, work how much you've got left over to pay creditors. If you can't afford to pay back all the money you owe, work out how much you can afford and offer to pay this. A debt adviser can help you do this.

5. Check to see if you can save money on your bills

If you're on a low income, you may be able to save money by getting help with your health costs such as prescription charges and dental costs. You may be able to claim help with education costs such as school meals and clothing.

You may be able to get a grant to help you pay for things like fitting home insulation and improving energy efficiency. Some people can get free help. This can help cut down the fuel bills.

Your gas and electricity supplier may be able to help you if you have fuel debts. To find out if you can get help, visit the British Gas Energy Trust website at: www.britishgasenergytrust.org.uk or the EDF Energy Trust website at: www.edfenergytrust.org.uk. You may qualify for cheaper tariffs, called social tariffs. Check with your fuel company. You might get a better fuel deal with another company.

There are some charities which give grants to people to help pay their bills or buy essential items. You can find details of these charities on the Turn2Us website at: www.turn2us.org.uk.

6. Check whether you can get benefits

Are you getting all the money you're entitled to? There may be benefits or tax credits you can get which you haven't claimed.

If you are in work, you might get Working Tax Credit even if you don't have children. If you have children, are you claiming Child Tax Credit? Even people with quite large salaries are entitled to this benefit. You may be able to get Council Tax Benefit or Housing Benefit to help you pay your council tax and rent. You don't necessarily have to be out of work to get these.

If you lose your job, go to your local Jobcentre Plus office and start claiming benefits as soon as you can. You might be entitled to benefits like Jobseeker's Allowance which could automatically entitle you to other benefits like Council Tax Benefit or Housing Benefit. You can also get help with your mortgage interest after a few weeks of becoming unemployed.

In some cases, whether you are in or out of work, you can make a backdated claim for benefits, that is, you can get money for a period in the past.

In some cases, you can work for a few hours a week without your benefits being cut.

For more information about benefits, see our benefits section.

An adviser can help you claim your benefits. Go to Further help for the contact details of organisations which can help.

7. Think twice about taking out a loan to pay off your debts

If you take out another loan, you may end up paying back a lot more than you borrowed and at very high interest rates. You may not be able to afford the repayments and the loan may be secured against your home which you could then lose.

Make sure you understand exactly what a new loan might mean for you and get advice before you sign anything.

For more information about debt in England, Wales and Northern Ireland, see Help with debt and in Scotland, see Help with debt.

8. Don't ignore your mortgage problems

There are rules about the steps that mortgage lenders must take before they can start court action against you – so try and get advice as soon as you start getting into difficulty with your mortgage.

Selling your home and renting it back might seem like a quick fix to your debt problems. But many mortgage rescue schemes offer very little security. You could end up paying very high rent or even being evicted. Get advice before you sign up to one of these schemes.

If you are struggling with mortgage repayments, you may be tempted to send the keys to your lender or abandon your property. Don’t do this without advice. You could still be responsible for the debt on the property and may be chased for it years later.

Always attend any court hearings yourself, with an adviser if possible. Court proceedings do not mean that you will automatically lose your home. The court process acts as a final check to make sure repossession is the last resort. Some courts have advice desks which can provide last-minute assistance.

For more information about what to do if you have problems paying your mortgage in England and Wales, see How to sort out your mortgage problems and in Scotland, see Mortgage arrears.

9. Check your rights if you lose your job

Make sure your employer gives you your legal rights if you lose your job. You might need advice about your employment rights. For example, you must not be dismissed unfairly and you must not be chosen unfairly for redundancy. You may have the right to a redundancy payment and other money you are owed, like unpaid holiday pay.

You can get help to look for another job. You can get advice on how to fill in application forms and prepare for job interviews. There’s extra support if you’re a lone parent, disabled, over 50, leaving school or college, or if you’ve been unemployed for a long time. Learning new skills could improve your career prospects for when the recession ends. Some courses are free, or you may be able to get financial help.

You can get free, confidential career and training advice if you phone: 0800 100 900 begin_of_the_skype_highlighting              0800 100 900      end_of_the_skype_highlighting.

For more information about your employment rights, see Basic rights at work. For more information about redundancy, see Redundancy.

10. Get help if you you lose your home

Your local authority has a legal duty to provide help to certain people who are homeless or threatened with homelessness. You may qualify if you are in priority need. This could be because you have dependent children or are pregnant. Or it could be that you are vulnerable because you're elderly or have a physical or mental illness or disability. Get expert advice about how to make an application for housing if you lose your home.

For more information about getting local authority help with housing, see Finding accommodation.

Check if you qualify for tax credits - quick questionnaire

Use this quick online questionnaire to find out if you're likely to qualify for tax credits. You will actually need to make a claim to get a definite answer but this questionnaire can help you decide whether to read on about tax credits or make a claim.

Before you start

Whether you qualify for tax credits depends on your personal circumstances (such as your age, if you work or have children) and your total income. The higher your income, the less tax credits you may be able to get. 

Once you've answered all the questions, you will be able to go to a more detailed questionnaire to get an idea of how much tax credits you might be paid.

Before you go to the first question, it may be helpful for you to get details, or have a rough idea, of your total income (including your partner's if you have one) for both:

• the tax year from 6 April 2009 to 5 April 2010
• the tax year from 6 April 2010 to 5 April 2011

The questionnaire should take no more than five minutes to complete.

• Go to the first question Opens new window

Don't use this questionnaire if...

Don't use this questionnaire if:

• you have a severe disability - this means you get the Highest Rate Care Component of Disability Living Allowance or the Higher Rate of Attendance Allowance
• you have a partner with a disability

If either of these situations apply to you contact the Tax Credit Helpline or use the more detailed questionnaire below. This takes about 10 to 15 minutes to complete and will give you a more accurate idea of whether you're likely to qualify and how much you might get.

• You have a disability - can you get extra Working Tax Credit?

• Tax credits calculator - find out how much you can get

• Contact details for the Tax Credit Helpline