THREE million families are facing a crisis this Christmas as they struggle to pay for essentials such as bills, food and rent.
Citizens Advice says one in ten families are on the brink as prices continue to rise and a cost of living crunch starts to bite.
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Low-income families in particular have been hit by a triple whammy of an end to the Universal Credit uplift, soaring energy bills and rising inflation.
Over recent months, households have seen everything from groceries to petrol prices shoot up.
Energy bills have surged as wholesale gas prices have rocketed and a string of providers have collapsed.
The price of second-hand cars has also surged, with Ford Fiestas between three and five years old now selling for £9,770 compared to just £7,448 two years ago.
According to data firm Kantar, even the price of crisps increased 7.6% in the three months to the end of October.
Citizens Advice is calling for urgent action to be taken to prevent a wave of hardship this winter.
The organisation fears 3.2 million households are facing financial crisis.
It said millions of people would be in the red or unable to cover the essentials.
A further 380,000 households have less than £50 to spare each month after covering their basic living costs.
It means hundreds of thousands of people are at risk of hardship if they face any unexpected bills or outlays.
One man in his 60s told Citizens Advice he was struggling with his bills and can’t afford healthy food to eat.
He said: “I’m constantly looking at the bank account.
“I’m living in one room to keep the heat down as low as a I possibly can, but everything is just mounting up.”
One in five people have already cut back on their food shop or use less heating to save money in the past three months, Citizens Advices found.
And one in 10 people expect to have to access crisis support such as food banks or fuel vouchers this winter.
Aasia Majid, an adviser at Citizens Advice in Manchester, said: “We’re hearing every day from people who’ve never had a food bank voucher but now can’t afford the weekly shop.
“Their income is the same or less but their costs have shot up.
“It’s a choice of which bill to fall behind on each month; a choice between the risk of eviction or being cut off.”
If you’re worried about rising costs, here are X things you should do now to help.
Check for unclaimed benefits
Millions of people are missing out on benefits they could be claiming.
Charity Turn2us has estimated that at least 7 million people are missing out on benefits they could be claiming, totalling a massive £15billion.
Council tax is the most underclaimed benefit, with almost 2.8million people not claiming what they should.
You can apply by entering your postcode into the government website, and asking your local council what support is available.
There are plenty of other benefits you might be eligible for too, such as Working Tax Credit or Income Support.
You can check by using an online benefits calculator, which are offered by charities such as Turn2Us and EntitledTo.
See if you’re eligible for welfare grants
Struggling families can apply for cash and grants for furniture, bills and food up to £1,000 under the welfare assistance scheme.
Grants are available through your local council – which will decide whether you’re eligible and what help is available. Some councils don’t have a scheme though.
A new £500 million Household Support Fund can also help with household essentials.
Families could get up to £1,500 to help with food and bills through this, but it’s determined on a case by case basis by your local council.
If you claim Universal Credit, you can apply for a Christmas emergency loan worth £1,000.
Claimants can get the loan to help while they wait for their first benefit payment to come through.
However, it is a loan, so you will have to pay it back – although there’s no interest.
Get help with your energy bills
While a good first step to lower your bills is to turn the thermostat down slightly and wrap up warm, no one should face the choice between heating or eating this winter.
Cold weather payments help cover the cost of heating homes when the temperature drops.
If the temperature falls to zero or below for seven days in a row, you can get £25.
You can check if your area has had a cold weather payment by putting your postcode into the government’s tool from November 1.
The winter fuel discount can get you up to £300 off your bills depending on your age, whether you receive benefits, and if you live alone.
Most people who are eligible get it automatically, but you can apply if not.
Shop around
Even if you’re not eligible for extra help with your bills, you can often bring the cost down by shopping around.
The current advice is not to shop around for an energy tariff while prices are rising, but there are plenty of other bills where you can still get a good deal.
Check to see when your home insurance, car insurance, mobile phone tariff, broadband bill and anything else comes to an end.
Make a note in the diary to start shopping around for a new deal a month before – this is typically when you can get the best prices.
You can lock in your price up to 29 days before the policy start date.
Martin Lewis has even recently advised that it could be worth coming out of your current deal early to get a better price – but watch out for exit fees.
Borrow cheaply
If you do need to borrow money, it makes sense to do it at the cheapest rate possible as this will reduce the amount of interest you pay back.
Loan rates are currently at their cheapest levels in some time, which is good news for borrowers.
You could also apply for a 0% credit card, which means you don’t pay interest on your purchases for a set period of time.
Balance transfer credit cards let you switch your current borrowing on to a new card for no fee, which can be a good way of consolidating smaller debts in one place.
You should check interest rates to make sure you’re getting the best deal by using comparison websites like Uswitch or MoneySuperMarket.
To check if you’re eligible for the cards with the best rates, MoneySavingExpert has a credit card eligibility calculator you can use.
Switch your bank or savings account
Banks are currently paying out cash to entice new customers, so it’s worth taking advantage of these deals if you meet the criteria.
Santander currently pays £140 if you switch to its current account as well a £20 Amazon voucher, and Nationwide pays up to £125.
Switching is easy – you just need to apply for the new account and the new bank does all the hard work of informing your existing bank and moving your direct debits over.
It’s also worth checking to see if you could get a better savings rate.
Rates have come up since the start of the year and you could be missing out on extra interest payments by not taking advantage.
Switch your mortgage
Interest rates are expected to rise soon, so it makes sense to lock in a cheap mortgage deal now.
Homeowners can get a mortgage at less than 1% currently, but providers have already been scrapping some of their best deals in anticipation of a rate hike.
If you’re on a fixed deal currently, be sure to shop around before it ends or you’ll wind up on the standard variable tariff – it’s not only usually much more expensive, but it will increase as soon as interest rates do.
Put a note in your diary three months before your mortgage deal is up so you can start shopping around.
If you’re struggling to meet your monthly repayments, you could talk to your lender about taking a mortgage holiday.
This can provide some breathing space but remember you’ll still accrue interest while you’re not paying, so it’s best reserved for emergencies.
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