Debt Charities (Explained, Examples and Further Discussion!)
In many of our MoneyNerd posts, guides and discussions, we talk about how free support is available via UK debt charities. So, we decided to discuss UK debt charities in a little more detail and highlight the best UK debt charities that you could consider using.
Keep scrolling to uncover some excellent charities that help people in debt without cost!
What Is a UK Debt Charity?
A UK debt charity is an organisation set up to help people who are in debt. As a charity, they do not charge for their services and support. They are instead funded through a number of ways: they receive payments from creditors through the ‘fair share system’, plus government funding from U.K. taxpayers and other sources of funding from charitable foundations and personal donations.
Debt charities have to re-invest all profits into the service. Staff are employed and paid salaries, but some operate with unpaid volunteers.
Most debtors struggle to deal with their debts, and even those that are on the right track may need emotional support. UK debt charities often provide a wide range of services including free debt advice and more. They are all authorised by the Financial Conduct Authority as debt counsellors.
Some charities are able to run debt management plans, and because they are a charity, they do not charge fees for this. What is on offer will depend on the specific debt charity.
The Benefits of Using a Debt Charity
Being in debt can feel lonely, especially if you want to keep your money worries to yourself just now. A UK debt charity is a place where you can find confidential support without having to pay. Other benefits of the best UK debt charities include:
- Free debt advice
- Free money help and tools
- Expert resources
- Some will even speak with creditors on your behalf
- Some offer free debt solutions
- They are deemed to give impartial advice as they are funded through donation, not fees
What Are the Best UK Debt Charities?
There are many debt charities in the UK. Some are bigger than others, but three of the most popular and well-known are Step Change UK, National Debtline and Christians Against Poverty.
#1: Step Change UK
Step Change UK is a debt charity that is entirely funded through the government, UK banks and other donations. They claim to offer the most comprehensive free debt advice process on the charitable market – and they might not be wrong.
They use a three-step process to evaluate your situation and even help set up a debt solution with creditors:
- They gather information on your finances to help create a workable monthly budget and identify what income is left to pay your debts.
- They offer debt solution advice based on the information they have
- They help agree a debt solution with creditors (and they stick around for support if needed!)
#2: National Debtline
National Debtline provide free debt advice online or over the phone. They do something similar to Step Change UK by working out your situation and providing possible solutions to consider. They also have a selection of online content that can be used to answer common debtor questions and worries.
One of the unique aspects of National Debtline is they run part of their charity to specifically help businesses that are struggling with debts. The only way they differ from Step Change UK is that they do not offer to arrange a debt solution directly with your creditors.
#3: Christians Against Poverty
Christians Against Poverty (CAP) is a debt charity that works with churches across the UK. As the name suggests, the charity is organised and run by Christians, but you don’t have to be a Christian to ask for help or receive it.
Anyone of any faith or no faith at all can get in contact with a CAP worker and ask for help. Their work is somewhat similar to the work of National Debtline by offering free debt advice and guidance on what debt solutions could work for your specific circumstances.
Christians Against Poverty is a smaller UK debt charity in comparison to the others. But it is a testament to their work that they are still one of the biggest debt charity names in the UK.
Money Advice Service
You may also hear of the Money Advice Service, which is a service set up by the government and acts as an introducer to the debt charities above. They also offer generic debt, pension and credit advice.
Is Citizens Advice a UK Debt Charity?
Citizens Advice is one of the best resources for people in debt. Contrary to what most people think, Citizens Advice is not one charity but a collection of over 300 charities spread across the UK. As their name suggests, their charitable work revolves around supporting people who need help with advice. They offer advice services relating to finances, but they also provide advice to do with other things such as the law, property, wills and more.
It would be fair to call Citizens Advice a debt charity in the UK, but unlike the aforementioned charities which solely focus on helping debtors, Citizens Advice help in other areas as well.
Debt Charities Vs Professional Insolvency Practitioners
You may already know by now, but there are plenty of ways that one person could get out of debt. From debt management plans to IVAs and even bankruptcy, the options available will depend on personal circumstances.
UK debt charities are always free. They can offer advice, and they can arrange some of the debt solutions available to you. However, for other solutions, you may need to get help from professional Insolvency Practitioners. For instance, IVAs have to be operated by an Insolvency Practitioner. No charities offer free IVAs or TrustDeeds.
Professional services like these are commercial, meaning you will have to pay fees (sometimes even monthly fees) to get their help. That doesn’t mean they aren’t worth their fees. If an IVA is the right debt solution for you, the fee will be worth it in the long run.
Is MoneyNerd a UK Debt Charity?
MoneyNerd is not a charity. We are a commercial enterprise.
We do not charge fees but receive a commission from our partners. If you use one of our providers we may receive a commission from them for your introduction.
You are helping maintain this website to help others who need personal finance information.
If you do click a link then thank-you for your support. We hope you find the right solution for your personal situation.