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Crippling Debt – What You Can Do Now

Crippling Debt

For free and impartial money advice and guidance, visit MoneyHelper, to help you make the most of your money.

Estimates suggest that around 27 million people in the UK have debt, with around 33% having personal debt outside of a student loan or mortgage of between £2,000 and £10,000. Clearly, it’s a common problem and one that’s growing.

Sometimes, these debts become so overwhelming that you might not know what to do. In such circumstances, you might feel your crippling debt is unsurmountable. However, that’s rarely the case. There are steps you can take to ease your problems, and we take a look at some of the essential information.  

What counts as too much debt?

There is no fixed answer to this question in terms of monetary value. Instead, it depends on your current financial and personal situation. Usually, lenders tend to measure whether you’re a suitable borrower based on your debt-to-income ratio. This is essentially how much you earn compared to how much you owe. 

Let’s take a look at an example. Let’s say you earn £2,000 per month after tax. If you owe £1,000 in debt repayments, then your debt-to-income ratio is 50%. Many lenders consider a figure of 40-45% to be quite high. 

Essentially, if you have more debt than you’re able to comfortably repay, this could also be considered as too much. Similarly, if you’re unable to service your debt (make payments on the principal and interest on outstanding amounts), you’re likely in financial trouble. 

How many people have crippling debt?

The average total debt per household in the UK was at around £60,526 in August 2020. Of course, some of this will be secured debt, including mortgages, which is less severe. However, a worrying statistic is that an estimated 1.5 million people were having difficulties with mental health and debt issues at the same time. 

The coronavirus pandemic has been a particularly hard time for many people. Estimates suggest that nearly 6 million UK adults have fallen behind on bills during 2020. Of course, this only adds more financial pressure in what is already a very difficult time. 

How long does it take to get out of crippling debt?

Again, the exact answer to this question depends a fair amount on your current situation. The more you owe, and the less you earn, the longer it will take to get out of debt. That being said, estimates suggest that it can take around two to four years to turn things around. 

Of course, there are options that can speed things up or take a little longer. However, it takes a long period of sustained effort to get out of debt. Although that may sound unpleasant, working at it now can mean that you have years ahead where things are a lot less stressful. 

How to get out of crippling debt

So, now that we know a little bit about how debt affects people across the UK, it’s time to look at some steps to solving the problem. Dealing with crippling debt can seem like an unforgiving process, but once you start to make progress, it can be rewarding. Here are some things you might try:

Know your situation 

Before you can start putting an action plan into place, you need to first understand your financial situation. If you have a lot of debt, it can be unpleasant to dig into the gory details of what you owe. However, only when you know the full extent of your crippling debts can you start making amends. Total up everything you owe and have a number to work towards in terms of clearing it. 

Understand income and outgoings 

Next, you’ll want to start figuring out finances on a monthly basis. As well as your income each month from your salary, benefits, savings, or other means, you should also look at your spending habits. Start with your fixed costs – the things that you absolutely have to pay no matter what. This can include your mortgage, bills, and other essentials. Then total your ‘luxury’ spends on treats and going out. Hopefully, you’ll be able to see how much you have leftover at the end of each month to pay back your debt. 

Create a budget 

Learning how to budget is essential for dealing with crippling debt. You need to set aside amounts each month for your essentials, as well as your debt repayments. Having a budget in place means you stop spending without thinking about it, and can reign in any further debt. 

Lower your interest rates 

One of the things that catches people off-guard when it comes to debt is interest rates. You might be paying quite a lot each month without actually clearing your debt. So, you should look into things like 0% balance transfer credit cards. These can reduce your monthly repayments and mean that you’re paying off what you owe rather than just standing still by paying interest. 

Pay off as much as you can 

It can be tempting to only pay the minimum amount each month towards your debt. However, in doing so, you’re only dragging the process out. Look back at your budget and see how much you can afford to pay back each month. You should set this number as high as is reasonably possible and start clearing that crippling debt. 

Look for debt help

Of course, it’s not always that easy to just start paying back what you owe. Your circumstances may mean that your repayments are more than you earn, or that the situation changes regularly. In such instances, you shouldn’t panic – there are plenty of ways to get help. 

A good place to start is by reading our debt options guide. This examines some of the ways in which you can write-off debt and make things more manageable. Whether it’s an IVA or debt management plan, you can reduce your monthly payments and make progress on paying off what you owe. 

There are also several organisations that can offer help, advice, and support to those struggling with debt. StepChange and National Debtline are useful charities you can use, while Citizens Advice is another resource worth checking out. 


Are you struggling with debt?
Are you struggling with debt?
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  • Reduce pressure from people you owe money to
  • Stop interest and charges from soaring