Debt

Moving into adulthood often means dealing with different types of debt. Not all credit is bad, but it’s important to recognise when you might need help and understand your options.

University or College Debts

These can include accommodation fees, loans, or fines like library charges. The consequences of not paying depend on the institution’s policies. Some universities or colleges might hold back your qualification or prevent further studies if you owe money, even if it’s not for tuition. If you feel this is unfair, your students’ union can offer independent advice.

Accommodation Debts

Whether you’re living in university accommodation or renting privately, rent arrears should be a priority. Falling behind on rent payments could lead to eviction, and if you’ve been in arrears before, your university or college might be less likely to offer accommodation in the future. It’s important to make arrangements to repay what you owe.

For those renting privately or in social housing, failing to pay your rent on time can put your home at risk. If you’re struggling, seek advice and try to reach an agreement with your landlord.

Council Tax

Council tax is another priority debt. Falling behind can lead to wage or benefit arrestment. Check your local council’s website for any exemptions or reductions you might be eligible for. For instance, if you’re the only adult in your home, you could qualify for a 25% discount, but you’ll need to apply.

Most full-time students don’t have to pay council tax, but if you’re living with someone who isn’t a student, or if you’re a part-time student, you may need to pay. Be sure to check with your council about your liability and budget accordingly.

Utility Debts

Gas, electricity, and water bills are common sources of debt for young people, especially in shared accommodations. To avoid issues, consider having bills in joint names, so that everyone is equally responsible. If you’re unable to pay, contact your utility supplier immediately to arrange a payment plan.

Prioritise gas and electricity debts for your current home, as providers can disconnect your service if you don’t pay or force you onto a pre-payment meter. If you’re facing disconnection, reach out for advice.

TV Licence

If you watch TV, including online streaming, you’ll need a valid TV licence. In university accommodation, communal areas might be covered by the institution’s licence, but if you have a TV in your room, you’ll need your own licence.

If you live in shared accommodation, one licence might cover the entire house, but if you have a separate tenancy or self-contained living space, you’ll need your own licence. Contact TV Licensing if you’re unsure.

Credit Debts

Credit debts like bank loans, credit cards, or overdrafts are typically lower priority than things like rent or utility bills because these companies can’t evict you or disconnect services. However, it’s still important to manage these debts carefully.

Overdrafts

If you have an overdraft, it may be tied to other debts, like a credit card from the same bank. If you want to keep your overdraft—especially if it’s interest-free—try to keep up with payments on your other debts to the bank. If you miss payments, they could revoke your overdraft or start charging interest, quickly increasing what you owe.

If you’re struggling to manage your bank debts, consider opening a new bank account. Your bank might also be willing to extend your overdraft or offer a repayment plan, so it’s worth reaching out to them for help.

If you’re unsure about managing any of these debts or need advice, don’t hesitate to seek support from a debt advice service.