Many of us find it hard to keep track of our bills and bank accounts. Remember that you can pay most bills and check your bank accounts online. This is often easier and quicker. It also helps you check your accounts more often.
Avoid paying bills late, as you may be charged extra. Credit card providers will charge you a penalty each time you miss the payment date and it may affect your credit rating.
The simplest way to ensure that your bills are automatically paid on time is to pay by direct debit. You can do this for most bills, including council tax, water rates, fuel, phone and your TV licence. Fuel providers often give a discount if you arrange to pay this way.
If you’re paying by direct debit, make sure you have the money in your account on the payment date. If you find it harder to know when you’ll have money, paying bills on an individual basis may work better for you.
You can even arrange to pay your credit card balance by direct debit. You choose whether the arrangement pays off the full amount each month, a set amount or the minimum repayment.
However, be careful paying for insurance by direct debit. Some policies – including many car or home insurance policies – treat it as a loan when you arrange to pay monthly rather than in one payment, and will charge you interest.
To arrange to pay a regular bill by direct debit, contact the company providing the goods or service.
If you’re confident that you’ll get around to paying bills, but find it hard to get to a post box, post office or bank, consider paying the bills online. This is now possible for most fuel, phone and credit card bills. Some companies give you a discount if you pay this way. If you have an online bank account, you can make all your bill payments online.
To arrange to pay a regular bill online, contact the company providing the goods or service. To sign up for online or telephone banking, contact your bank.
Or, if you prefer, you could make all your payments using telephone banking.
Prioritising your bills
If you’re finding it hard to pay your bills, don’t ignore the problem. Debts quickly get worse if they’re left. It’s especially important to deal with any priority debts. We have more information about these below.
If mortgage payments aren’t made for a few months, your property or home may be repossessed. However, there are schemes designed to help those struggling with mortgage payments. Visit gov.uk (England, Scotland and Wales) and nidirect.gov.uk (Northern Ireland) and search for ‘mortgages’ for more information.
Rent arrears (unpaid rent)
You could be evicted after eight weeks if you don’t pay your rent. If you’ve made an application for Housing Benefit or universal credit, it’s important to make sure your landlord is aware of this.
Council tax or rates
In England, Scotland and Wales, you could face a magistrate’s court fine or eventually more serious action if you miss council tax payments. In Northern Ireland, you could be taken to court for not paying your rates.
Unpaid gas or electricity bills
Your gas and/or electricity may be disconnected if you don’t pay these debts, but explaining your circumstances to your energy supplier may stop this from happening. If you’re ‘vulnerable’ and are unable to pay your bills, most of the major energy suppliers will not disconnect your supply. But you have to let them know that you’re classed as ‘vulnerable’. You might be ‘vulnerable’ for reasons of age, health, disability or severe financial insecurity.
Fines, maintenance and compensation orders
You may face a magistrates court (sheriff’s court in Scotland) fine for failing to pay these.
You may face a magistrates/sheriff’s court fine for failing to pay this, and a bailiff (a person legally authorised to recover a debt) may be given the right to seize your possessions.
Tax and VAT
Failing to pay these means you will be charged interest and penalties, may be taken to court and your possessions up to the value of what you owe may be seized. You may face a magistrates/sheriff’s court fine for failing to pay.
Hire purchase and conditional sale agreements
Items you have purchased using these may be repossessed.
Civil action could be taken and your vehicle could be seized. These penalties should be treated as priority debts because of the level of action that can be taken.