Struggling with debt? Five ways to manage it in 2022

Average household debt has soared to nearly £70,000 in 2021, and experts predict this will top £82,500 by 2025. While much of this debt is secured against property, according to the UK Debt Service, the average adult owes £3,724 on credit cards, loans and overdrafts.

Add to that the uncertainties surrounding the coronavirus pandemic, and what this means for many people’s income, it’s not hard to see why the appetite for getting finances back on the straight and narrow is certainly strong.

With this in mind, here are five ways to help you manage your debt in 2022.

1.    Organise your debts and finances

The first step towards managing your debts is knowing what they are and where you owe them. You should start by listing all your fixed monthly outgoings, so you can understand to what extent you need to make cutbacks. Make sure you include your rent or mortgage, council tax, utilities, any loans, store or credit cards, overdrafts, and any other essential costs, such as travel and childcare.

Once you have your total, you’ll have a much better idea of where you stand. If you have cash leftover each month or can make some simple lifestyle changes to save money, you might be able to use some of it to reduce your debt further. On the other hand, if your outgoings exceed your income and there’s little wiggle room, you’ll need to take more immediate action to get everything under control.

2.    Get a debt consolidation loan

A debt consolidation loan lets you borrow one lump sum that’s then used to pay off your other debts, leaving you with just one monthly repayment to manage, rather than several. Debt consolidation loans often let you borrow over a longer period of time, which means your monthly repayments can be lower, helping to make day-to-day living more manageable. These loans will usually be secured against your home, which you could lose if you fail to keep up with your repayments.

Often, your interest rate will be lower than the rates you pay on other credit cards and loans, but the amount you pay back overall might be higher since your debt consolidation loan will be over a longer time. While this could be the case, the effects a debt consolidation loan can have on lowering your monthly repayments can have enormous benefits on making day-to-day living easier and much less stressful. You can also make overpayments should you find yourself with more money, to help you pay off your debt faster.

The experts at have a very useful debt consolidation calculator to help you understand your position better. It lists your total amount of debt, how much you’re paying each month, and how much you could reduce your monthly outgoings by should you consolidate your debt.

3.    Get a balance transfer credit card

If most of your debt is spread over credit cards, then you might benefit from getting a balance transfer card. These let you move an existing credit card balance to another card, where you’ll get a certain number of months to clear your balance interest-free.

When transferring a balance, you usually pay a fee, worked out as a percentage of the amount you move over. Even though there’s a fee, you’ll often save more money by transferring your balance and taking advantage of the interest-free offer than if you didn’t do anything at all.

Keep in mind, you should set up a payment schedule that aims to clear your balance before the offer ends, otherwise you’ll end up paying interest on whatever’s left. While you could get another balance transfer card at the end of the offer, it’s much better to focus on paying off the debt, rather than moving it around.

You should also know that the longer interest-free offers and larger credit limits are usually reserved for those with good credit ratings. You might not get a large enough credit limit or enough interest-free months to clear your balance if your credit score is on the low side.

4.    Make more money

This is sometimes easier said than done, but you’ll be surprised at how much difference even the smallest increase in income can make to managing your debts.

January is often the time for performance reviews, so it might be worth asking your employer for a pay rise, explaining carefully why you think your work deserves one. If you’re unsuccessful, it’s always worth negotiating a statutory pay increase, to update your income in line with costs of living.

If all that fails, you might need to get a second job temporarily. While this might not be ideal for some people, it could give you the necessary income boost to make your debts more manageable and get you out of the red. Just make sure any side hustle doesn’t conflict with your main job.

5.    Seek professional advice

If you feel as though you’re struggling to manage your debt, the worst thing you can do is suffer in silence and hope the problem will go away. Fortunately, there are several charities that specialise in helping people with problem debt that can offer you free advice. These include Citizens Advice, National Debtline, and StepChange. It’s always worth seeking professional advice to understand that you’re not alone and that you have options available.