Debt charity StepChange found 15% of private renters (an estimated 1.1 million people) are now in problem debt compared to 8% of the general population.
Here, Which? outlines what steps tenants can take to help manage and get out of debt.
1. Work out if your debt is a problem
Debt isn’t always a problem and most people will have some form of it, whether that’s a credit card, student loan, or an overdraft on their current account.
If you have debts that you pay off each month and don't exceed your yearly earnings, then you probably have managed debt. However, if your debts add up to more than you earn in a year or you’re struggling to repay them, you may well have problem debt.
StepChange defines severe problem debt as someone selecting three or more of these signs of financial difficulty:
2. Get rent payments back on track
If you're struggling to pay your rent or have already missed a payment, you should contact your landlord or letting agent as soon as possible to discuss your options.
While your landlord isn't obliged to offer support, they may be willing to discuss a compromise that will enable you to keep living in the property, such as reducing your monthly payments for a while.
Tenants in England or Wales may be able to qualify for a government scheme for people struggling with debt. It’s called the Debt Respite Scheme, also known as Breathing Space.
The initiative provides temporary respite from eviction for 60-day period, at which time you should still make rent payments if you can.
Find out more:3. Challenge rent rises
According to StepChange half of all private renters (3.7 million people) have seen their rent increase in the past 12 months and renters are spending 37% of their income on rent, compared with 29% for social renters and 27% for those with mortgages.
Alternatively, consider whether moving to cheaper place would work for you. Use a property portal such as Rightmove or Zoopla to find cheaper areas close to where you currently live. It’s important to ensure you balance the cheaper rent with other costs, such as a potentially longer commute.
4. Reduce your priority household bills
Other essential bills, such as council tax and energy, might be worth reviewing.
You might be able to save on council tax, for example, if you live alone or have people living with you that are not counted as a second resident, such as an 18 or 19-year-old in full-time education.
Stopping heat from escaping through gaps around doors and windows could save you around £60 a year, according to Energy Saving Trust. Also doing laundry at 30ºC (rather than 40ºC) cuts the cost by 38%, according to our tests.
Find out more:5. Tackle expensive debts first
StepChange's report found more than 1.2 million private renters (17%) are using credit to make ends meet.
If you’re struggling with making repayments on any kind of borrowing, whether that’s a credit card or loan the best thing to do is to contact your lender to explain the situation. Lenders may be able to adjust your repayment plan or give you a repayment holiday.
Once you have a bit more stability focus on clearing debts that are costing you the most in interest. For example, if you have a a credit card charging 18.9% APR it's worth trying to pay this down.
Find out more:6. Explore ways to make extra money
Once you've come up with some ways to reduce your outgoings you can focus on making a bit of extra money.
Selling the things you never use could be an option. You can sell your preloved stuff on eBay, Depop or Vinted. Just watch out for fees, which can eat into any profits you make.
Or there's mystery shopping, which lets you get paid for things you already enjoy doing. Mystery shoppers are regularly used to test supermarkets, retailers, restaurants and hotels. You can register with websites such as Mystery Shoppers and Market Force to see what assignments they are running.
Find out more:7. Check what benefits you can get
Find out more:How renters could be better protected
The government unveiled the new Renters' Reform Bill last month, which has a series of measures to improve tenant rights.
The long-awaited shake up to the private rented sector in England aims to help 11 million tenants benefit from 'safer, fairer and higher quality homes', and includes a ban on no-fault evictions and improving the rights of tenants to have pets.
Find out more: undefinedsource https://www.which.co.uk/news/article/7-tips-for-renters-to-get-out-of-debt-aa6ep5O9raDk