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Making the most of your money

This fact sheet covers England & WalesWe also have a version for Scotland if you need it.

If you are struggling to make ends meet at the moment, you aren’t alone. Millions of households are finding it hard to pay for everyday items as prices for essentials like food, gas and electricity have rapidly increased.

Use this fact sheet to:

  • find out if you can pay less for your everyday living costs;
  • check you are getting everything you should be, such as benefits and other sources of income; and
  • understand if you may get help.

Budgeting

Budgeting is really difficult at the moment as many items have increased in price. This increase in the cost of living means most people will need to try and save money where they can.

You may be paying more than you need for everyday goods and services or paying for items you no longer need.

Go through your income and expenditure to gain an idea of what you are spending your money on and how much. You can complete Your budget on our website. To make sure the budget is accurate, it may be helpful for you to have a look at your bank statements.

Deficit budget sheet

A deficit budget means not having enough money to pay for essentials such as your home, food or travel to work, even before you pay any debts.

If you find that you have a deficit budget or you have started missing payments on your household bills or debts, contact us for advice.

Check your regular payments, such as direct debits, standing orders and recurring payments. Make sure that all the payments are essential and that you aren’t paying twice for items.

If you have direct debts or standing orders set up that you no longer need, you should be able to cancel them using online banking. If you can’t cancel them, or don’t have online banking, speak to your bank.

You may have given a company your credit or debit card details to set up a recurring payment, this is called a continuous payment authority. You will need to write to your card issuer asking for this payment to be stopped. You can use the sample letter on our website.

Budgeting apps

A budgeting app may help you stick to a budget and find savings. Many budgeting apps only work on smartphones, but there are some that work on computers. Budgeting apps can provide a range of tools to help you budget, including:

  • allowing you to see spending from all your accounts in one place;
  • splitting your payments into categories so you can see where your money goes; and
  • alerting you to areas where you may be being overcharged.

Some will charge a small monthly fee, but many are free of charge. You can find out more about each budgeting app on the Which? website.

Save money on your food and grocery bills

Groceries are usually a big part of your household spending. The cost of an average shop has gone up a lot recently so you may be finding it difficult to afford the things you would normally buy.

Here are some ways to try and reduce your grocery spending.

  • Plan your meals for the week and write a shopping list. MoneyHelper research shows that 60% of people who use a shopping list spend less in the supermarket.
  • Use loyalty schemes and money-off coupons if they give you the best deal. Be 'money smart' and check the unit prices (supermarkets usually put this information on the front of the shelf). Bigger jars and multi-packs aren’t always the cheapest option.
  • Supermarkets vary in the amount they charge for items; you could consider changing where you buy your groceries to try and save money. Which? have compared the prices in the UK’s biggest supermarkets, find out more on the Which? website.
  • Most supermarkets reduce the cost of items when they are nearly out of date. Usually marked with a yellow label, buying these items can save you money. Ask your local supermarket what time of day these items are usually available to buy.
  • Could you take food to eat at work rather than buying it at work? Making food is usually a lot cheaper than buying ready-made food at work. Factor any extra amounts you’ll need into your grocery shop.
  • MoneyHelper has a guide on how to try and prepare meals on a budget.

Help with food costs

If you are struggling to afford to buy food from the supermarket, don’t be embarrassed to get food from elsewhere. Doing this could free up money to pay for other essential items. Many people get help with their food through charitable organisations, they are there to help and provide valuable support. We’ve outlined some of the main sources of help below.

  • There are a growing number of Local Pantries which may help you save money on your grocery shopping. You will need to become a member of your Local Pantry by paying a small weekly amount. You will then be able to choose food weekly from the pantry up to the value of £20. Each pantry has its own membership criteria so you’ll need to contact them to find out if you can join. You can find if there is an existing Local Pantry near you by typing your postcode in the search box.

  • Feeding Britain provide affordable food clubs which work in a similar way to Local Pantries, a small fee is paid each week and you’ll be able to choose up to 20 items of food. You can find your local food club here.

  • FoodCycle offer free hot meals to anyone who needs them. You don’t need a referral or voucher and it doesn’t matter what the reason is for needing their help. Volunteers will provide you with a meal and any support you need. You can find your closest FoodCycle location here.

  • There may be other local food projects which can help. Whilst there isn’t a website to find them, you can search on the internet by trying searches such as ‘community grocery’.

  • Community fridges share surplus food free of charge. Food is usually supplied by local businesses and individuals. You can see if you have a community fridge near you on the Community Fridge website.

  • Olio is a free app which helps you find food items local to you that may otherwise be thrown away. You’ll need a smart phone to be able to use Olio. Once you have downloaded the Olio app, a list of people giving away food locally will appear. You can then request and arrange collection of the food.

  • Too Good To Go is a free app which puts you in touch with local business to buy food that they would otherwise have been thrown away. The food parcels will be much cheaper than you’d pay for similar items at the supermarket.

  • Trussell Trust food banks can give you a minimum of three days' food in an emergency. You will need to obtain a voucher first. You can get vouchers from various places such as a doctor or health visitor. Some Jobcentres, councils and local Citizens Advice also provide vouchers. You can contact your local Trussell Trust food bank to find a full list of who gives out vouchers locally. For information about your nearest food bank go to the Trussell Trust website or contact us for advice.

  • There are over 1000, independent food banks across the UK which can help. Each food bank will have its own eligibility criteria. You can find a local independent food bank through www.foodaidnetwork.org.uk.

Save money on energy costs

Many people are struggling to pay their gas and electric as the cost of energy has risen significantly. We know that not being able to afford you energy payments can be a cause of anxiety. You’re not alone; Citizens Advice think that more than a quarter of us won’t be able to afford our energy bills in October.

Below you’ll find some of the support available and steps you can take to try and make your energy bills as affordable as possible.

Government support

The government has announced support to help households with rising energy bills. See our Dealing with high gas and electricity bills fact sheet for more information along with advice to save money on your energy bill.

Should you cancel your direct debit?

There has been some discussion in the news and social media about customers cancelling their energy direct debit. If you can afford your monthly payment, then we suggest that you continue to pay. We only suggest cancelling your direct debit if it seems likely the direct debit will bounce or if taking the payment would cause you more financial difficulty, for example it would take you into an unauthorised overdraft.

Non-payment can result in higher bills and affect your credit file. Your energy supplier could also look at fitting a prepayment meter or, if you have a smart meter, switching it to prepayment. If you really can't afford your payment and you are going to cancel your direct debit, you should use Your budget to show your energy supplier what you can afford and pay this lower amount to them instead. You should be able to set up a standing order which allows you to control how much you pay to your supplier. Ask your supplier to accept this payment until the situation improves and ask that no action be taken.

If your energy supplier isn’t helpful, call us for advice. Our Gas and Electric arrears fact sheet also has more information on how to deal with any arrears you may have.

Should you switch supplier?

Energy costs are one of the biggest costs for most households, so it’s usually worth checking whether you can save money. However, due to the recent rise in the energy price cap, it is unlikely you will find any cheaper deals at the moment. The price cap and the current problems with switching supplier are explained on the Money Saving Expert website.

If you have a fixed deal, do a comparison before your agreement ends. Plan ahead and add a note to do this in your diary. If you want to stay with your existing supplier, you may still be able to save money. Contact your supplier and ask if you are on their cheapest deal.

You can find a list of energy price comparison websites on Ofgem’s website.

Here are some other ways to try and reduce your energy costs.

  • Paying for your energy by fixed monthly direct debit can be a cheaper option. This is where you pay an amount each month based on what your supplier thinks you will use.
  • Smart meters are a type of gas and electricity meter that can send automatic meter readings to your supplier. Smart meters also come with an in-home display, which is a device that shows you how much energy you are using. The information from an in-home display may help you to identify how you can reduce your energy usage to save money. The Smart Energy GB website has more information about smart meters and their benefits.
  • If you have a prepayment meter, you are probably paying more for your energy than you would on a credit meter. See whether your supplier will let you change to a credit meter. For more information, go www.citizensadvice.org.uk and search for ‘Decide if prepayment is right for you’. If you can't access the internet, you can call Citizens Advice consumer helpline on 0808 223 1133. To speak to a Welsh-speaking adviser, call 0808 223 1144.
  • Using less energy will save you money. Simple Energy Advice has useful information on saving energy, cutting costs and home energy grants. Go to www.simpleenergyadvice.org.uk or call 0800 444 202.
  • If you live in Wales, you may also be able to apply for free home energy-efficiency improvements through the Nest scheme. Go to www.nest.gov.wales or call 0808 808 2244.

Save money on clothing

Can you reduce how much you spend on clothing? Don’t be tempted to remove this figure from your budget completely as you are likely to need some clothing or footwear in the long run.

  • It is usually cheaper to buy second hand clothes. You can get second hand clothes through a variety of places such as charity shops, car boot sales and eBay. There are also apps such as Vinted and Depop that you can use to buy second hand clothes. You’ll need a smart phone for these apps.
  • You may be able to get free clothing through Freecycle or Freegle. People offer various items, including clothes through these websites. You can reply and arrange collection.
  • If you have children, you may be able get help with the cost of school uniforms. Money Saving expert has more information on who is eligible and how to apply.

Save money on water costs

This is an area that people often overlook, but you could save money by paying less for your water. Here are some ways to try and reduce your water bills.

  • Water meters charge you for the water you actually use. Switching to a water meter could reduce your water bill. Use the Water Meter Calculator on the ccwater (CCW) website to check if you can save money. Go to www.ccwater.org.uk and search for ‘Water Meter Calculator’. If you can't access go online, you can call CCW on 0300 034 2222 if you live in England or 0300 034 3333 if you live in Wales.

  • If you are on a water meter, reducing the amount of water you use will also help to reduce your bill. CCW has tips on how to use less water. Go to www.ccwater.org.uk. If you can't access the internet, you can call CCW on 0300 034 2222 if you live in England or 0300 034 3333 if you live in Wales.

  • Most water companies have social tariffs which give a special rate for people on low incomes or receiving certain benefits. The tariff will vary depending on your supplier, but it is possible you may receive a discount of 50% or more on your water bill for a period of time. Contact your supplier to ask about their social tariff scheme. You can find a list of water companies and any social tariffs they provide through CCW's website.

  • You may be able to get your bill reduced if you are on a water meter, get certain benefits and meet other conditions. There are two schemes to look at: WaterSure if you live in England and WaterSure Wales if you live in Wales. Water Sure limits your bill to an amount equal to the average bill that the water company charges its customers. Water Sure Wales caps your bill at a set amount. If you use a lot of water, your bill will go down with either scheme, speak to your water supplier to see if you would benefit.

See our Water arrears and trust funds fact sheet for more information on trying to save money on your water bill and dealing with any arrears you may have.

Save money on phone and broadband costs

Whether it’s a landline or a mobile contract, phone costs vary between providers. Broadband costs also differ depending on the type of contract or package you have. You could be paying a lot more for a service than you need to.

Check if you can get a better deal elsewhere. Ofcom has a list of approved comparison sites that you can use. Go to www.ofcom.org.uk and search for ‘Price comparison’. If you can't access the internet, call Ofcom on 0300 123 3333. To speak to a Welsh-speaking adviser, call 0300 123 2023.

Here are some other ways to try and reduce your phone and broadband costs.

  • Many broadband providers have a ‘social tariff’ that limits the cost of phone or broadband for people who receive certain benefits. Ofcom has links to these providers and includes the cost, speed and eligibility criteria for each one. It is really worth checking if you are eligible for a social tariff scheme.
  • See if you can save money by buying your broadband and landline in a package from the same provider. This is called a ‘bundle’. Ofcom says that you could save at least £15 a month by buying your broadband and landline services as a bundle.
  • Pay by Direct Debit. It’s usually the cheapest way to pay.
  • Check your mobile phone contract. Are you paying for a service that you do not need, such as voicemail or call barring?
  • Avoid using directory enquiries if you can. If you do, dial the number they give you instead of agreeing for them to transfer you.

Save money on travel costs

If you drive, you’ll have noticed the cost of filling up your vehicle has gone up a lot recently. Travel costs can make up a lot of your monthly spend. There are ways to try and reduce your spending whether you drive or use public transport.

  • If your car insurance is due for renewal, it’s likely that you will find a cheaper policy by switching your provider. You can compare car insurance quotes through Uswitch.

  • Buy cheaper fuel if possible. Petrolprices.com compares prices in over 800 forecourts.

  • Sharing lifts to work will help reduce the amount you spend on fuel. www.liftshare.com can help you find people in your local area that are looking to share a lift.

  • Can you travel by public transport or cycle instead of using a car? If you use public transport, is it cheaper if you buy a weekly or monthly travel pass or a season ticket?

  • If you need a bike, you may be able to get one at a reduced cost through the Cycle to Work scheme.

  • If you travel by train, check if you would be eligible for a Railcard, you can save up to a third on the cost of your journey.

  • Buying train tickets in advance will usually be cheaper.

  • Your child may be entitled to free school transport if they live a certain distance away from their school or you have a low income. More information can be found on the GOV.UK website.

Where to find more money saving tips

The websites below have more money savings tips you may find useful.

Help from benefits

Make sure you’re getting all the benefits you should be. It’s estimated that at least seven million people aren’t claiming the benefits they should be, and any extra income will help you pay for essential items.

There are lots of different types of benefits. Each benefit has its own set of rules. What you are entitled to will depend on your personal circumstances. It can be affected by things such as your age, household income, savings, National Insurance contribution (NIC) record and whether you are able to work.

We have listed some of the main benefits below, if you click on the relevant benefit you’ll find more information about the benefit, the eligibility criteria and how to apply.

You can do a free personalised benefits check with Turn2us in less than 10 minutes. Millions of people already have, so don’t miss out: go to www.benefits-calculator.turn2us.org.uk and see what you could get.

Out of work and low income

  • Universal Credit is now the main benefit for people who are out of work or are on a low income. Depending on your situation, Universal Credit can also help with housing costs, the costs of raising a child and childcare costs.
  • If you are looking for work, you may be able to claim New Style Jobseekers’ Allowance.
  • If you have a low income or receive benefits, you may be eligible for a Council Tax Reduction.

Children

If you have children from a former relationship, check you are getting the correct amount of child maintenance. You can find advice and arrange child maintenance on the GOV.UK website. If you are unable to use the website, you can speak to a Child Maintenance Service case worker on 0800 171 2345.

  • If eligible, Universal Credit can help with the costs of raising a child and childcare.
  • Most people with children can also claim Child Benefit.
  • You may be able to claim Maternity Allowance if you need to take time off work to have a baby.
  • A sure start Maternity Grant is £500 that can help with the costs of having a child if you receive certain benefits.

Ill or disabled

  • Personal Independence Payments can help people aged over 16 with the costs of a long-term health condition or disability.

  • If you are employed but too ill to work, you may be entitled to Statutory Sick Pay.

  • New Style Employment and Support Allowance can help people who do not receive Statutory Sick Pay but have limited capability to work due to illness or disability. It can be claimed alongside Universal Credit.

  • If you look after someone who is ill or disabled for at least 35 hours per week, you may be able to claim Carer's Allowance.

People over pension age

  • You may be able to claim Pension Credit if you are over state pension age and are on a low income.
  • If you are eligible for Pension Credit you will also receive a free TV Licence.

Housing costs

Help from charitable grants

Lots of organisations have set up charitable funds that give grants if you are in financial difficulty. This is money that could help make your situation easier to manage and you do not need to pay it back.

Each organisation has its own rules for who it will help. These vary and could, for example, be based on:

  • where you live;
  • your, or your partner's, current or previous job;
  • whether you have any medical needs; or
  • your financial situation.

Turn2us can search over 1,700 charitable grants for you. Use the Turn2us Grants Search tool to find charitable organisations that might be able to help you. Go to https://grants-search.turn2us.org.uk. It takes less than five minutes on average.

See our Help from charitable organisations fact sheet for more information along with tips on applying for a grant.

Energy and water grants

Several energy and water providers have charitable grants that can help people to pay their bills if they are in financial difficulty. Details of any grants will be on your energy supplier’s website. You can also find water and energy grants through the turn2us grants search.

Help from government support schemes

With the cost-of-living increases affecting so many people, the government has announced support schemes that may help you with paying for some of your essential items. If you find yourself struggling to pay your bills, buy food or need to purchase an essential item you should speak to your local council to see what help they can provide.

Cost of Living Payment. You may be eligible for a payment of up to £650 if you are getting certain benefits or tax credits.

The payment will be made in two instalments. To be eligible for the first instalment you must have been entitled, or later be found to be entitled to payment of:

  • Child Tax Credit or Working Tax Credit (or a tax credit annual award of at least £26) for any day in the period 26 April 2022 to 25 May 2022;
  • Universal Credit for an assessment period that ended in the period 26 April 2022 to 25 May 2022; or
  • either income-based Jobseeker's Allowance, income-related Employment and Support Allowance, Income Support or Pension Credit on any day during the period 26 April 2022 to 25 May 2022.

If you are eligible, payments will be made into the account you have your benefit paid into.

  • If you are eligible because you receive Child Tax Credit or Working Tax Credit, the first instalment of £326 should have been paid to you by 7 September 2022 and the second payment will be made from winter 2022.
  • If you are eligible because you receive another qualifying benefit, the first instalment of £326 should have been paid to you by 31 July 2022 and the second payment will be made from autumn 2022.

If you believe that you should have had the first payment but have not yet received it, you should contact the office that pays your benefit or complete an online GOV.UK form to report a missing Cost of Living Payment.

For more information, see GOV.UK.

Disability Cost of Living Payment. You may be eligible for a one-off payment of £150 if you are getting one of the following qualifying benefits: Disability Living Allowance, Personal Independence Payment, Attendance Allowance, Constant Attendance Allowance, Armed Forces Independent Payment or War Pension Mobility Supplement.

To be eligible, you will need to have received (or later receive) a payment of a qualifying beneift for 25 May 2022.

If you are eligible, you should receive the payment in September 2022. The £150 will be in addition to any entitlement you have for the £650 Cost of Living Payment.

For more information, see GOV.UK.

Council tax rebate and discretionary fund (England). If you live in England, you may be eligible for a council tax rebate of £150 if you were liable for council tax on a property within band A-D on 1 April 2022.

If you are eligible and you pay your council tax by direct debit, you should receive the money into your bank account. If you do not pay by direct debit, your local authority should contact you to invite you to make a claim for this payment.

Local authorities will also be helping some households in England that are not eligible for the £150 council tax rebate payment. This may apply to you if your home is exempt from council tax or you have a low income and your home is in council tax band E-H. Contact your local council for information on eligibility and how to apply.

See GOV.UK for a tool to check your council tax band and for a fact sheet with further information.

Cost-of-living payment (Wales). The Welsh Government has announced that a £150 payment will be provided to all households that on 15 February 2022 were

  • in receipt of Council Tax Reduction; or
  • occupied households in council tax bands A-D.

If you are eligible and you pay your council tax by direct debit, you should receive the money into your bank account. If you do not pay by direct debit, you may have to register details with your local council to receive the payment. For more information, contact your local council.

Winter Fuel Support Scheme (Wales). Under this scheme, you may be eligible for a one-off payment of £200 if you are in receipt of certain benefits. If you are eligible, you will need to apply to your local authority for the payment. Applications open on 26 September 2022.

For more information, including full eligibility criteria, see GOV.WALES.

Household Support Fund (England)

The Household Support Fund allows councils to give small grants to help vulnerable households meet essential costs, including paying energy bills. Contact your local council to check if you may be eligible for support from the fund.

Welfare assistance schemes

In England, some councils have a welfare assistance scheme which can help if you are in an emergency situation. Individual councils decide on the rules for their scheme. Contact your local council to see whether they run a welfare assistance scheme and what it offers.

In Wales, the Discretionary Assistance Fund may help if you are in financial difficulty because of an emergency or disaster. It can give grants or provide items, such as white goods (for example, fridges and washing machines) to help with essential needs. It can also help vulnerable people to live independently. Go to https://gov.wales/discretionary-assistance-fund-daf for more information.

Other ways to make the most of your money

  • If you are on the minimum wage, check you are being paid the right amount. This usually goes up every year and is linked to your age. Go to www.gov.uk and search for ‘National Minimum Wage' and 'National Living Wage rates’.

  • Everyone is entitled to a personal tax allowance, which is the amount you can earn before you pay income tax. There are also other tax allowances and reliefs which depend on your age and personal circumstances. Check you are getting all your allowances. Go to www.gov.uk and search for ‘Income Tax rates and Personal Allowances’. You can ask for tax allowances to be backdated for up to four years. Check your position by calling HM Revenue & Customs general enquiries on 0300 200 3300. To speak to a Welsh-speaking adviser, call 0300 200 1900.

  • If you are on a low income you may be able to get help through the NHS Low Income Scheme. The scheme can help with prescriptions, dental, eye care and more.

  • If you need regular prescriptions you may save money through a NHS Prescription Prepayment Certificate.

  • If you smoke, can you reduce your smoking costs? Your GP may be able to help with this. The NHS has a Quit Smoking website and mobile app that can help.

  • Do you have a spare room in your home that you could rent out to a lodger? The Rent a Room Scheme allows you to earn up to a certain amount without paying tax. You will need to check how this income will affect any benefits you are claiming and that your landlord or mortgage lender agrees to this. Go to www.gov.uk and search for ‘Rent a room in your home’ or contact us for advice.

  • Make sure that any grown-up children or other adults that live with you are paying enough towards the household expenses.

Other fact sheets that may help you

Dealing with high gas and electric bills fact sheet

Gas and electricity arrears fact sheet

Mobile phone debt fact sheet

Water arrears and water trust funds fact sheet

Ways to clear your debt fact sheet