How to get your finances back on track

We all try to make plans for the future, putting money aside in a pension, investments or just saving for a rainy day.

However, sometimes things happen that force our plans to change. If you find yourself facing financial difficulties that you weren’t expecting, it's common to worry and have questions about what to do next.

As a bank that cares about our customers, we listen and work with them to understand the challenges they face. We know that debt problems are common and can happen to anyone for a wide range of reasons.

From all of our experience supporting our customers, we have gathered together some helpful answers about what to do when things don’t go to plan.

I'm worried I won't be able to get out of my overdraft

This is a common worry for people who find that their monthly outgoings regularly exceed the money they have coming in. It can become harder and harder to get out of debt if you keep having to borrow more from your overdraft each month.

Our support team can offer a range of financial plans to help you with this if you have an overdraft with us. Depending on your situation, we can put in place a repayment overdraft which helps by reducing your overdraft limit each month based on your financial circumstances.

We may also be able to review and reduce your overdraft interest rate if you're struggling. We will work with you to understand the best option for your circumstances. We can also give guidance on ways to manage your budget, helping you to make savings each month which could go towards paying off your overdraft.

What if I need to borrow even more money to pay off debts I already have?

This could be a sign of problem debt, so you need to take action. If you're a Co-operative Bank or smile customer, get in touch with us if you are worried about your finances and need support and guidance on what to do next. Our support team will listen to your situation and help you to find solutions best suited to your circumstances.

This could include referring you for specialist support from one of our partner organisations, including leading debt charity StepChange and Citizens Advice. These organisations are experienced at helping people overcome the most severe debt challenges and can provide the support you need to get your finances back on track

I'm worried I won't be able to pay the bills this month?

In the first instance, you should contact the billing companies to discuss your options. Many of these companies will have a specialist team who can help you manage your debt, such as by putting payment plans in place for you.

Remember that some bills are classed as priorities because the consequences of not paying them are greater than others. Examples of essential bills according to StepChange include mortgage or rent payments, council tax and energy bills. Create a list of bills in order of importance to understand which bills you need to deal with first.

What do I do if I have a payday loan that I can't clear?

Payday loans are another common reason that people find themselves getting deeper into debt. These loans can have very high interest rates that can potentially make your debt problem worse over the long-term.

If you're struggling to pay back a payday loan, contact the lender directly to discuss your options. You can also contact third party organisations such as StepChange or Citizens Advice to receive impartial advice and support for dealing with debt from a payday loan.

Will taking a payment holiday impact my credit score?

Payments we've allowed you to miss during your payment holiday will not be reflected on your credit file as missed payments, however please be aware that other lenders may take your payment holiday into account which could impact your ability to obtain credit in the future.

If you need a payment holiday, you should talk to your creditor and find out if there is a payment holiday option on the product. Whilst there have been payment holidays on certain products due to the COVID-19 pandemic, these might not be an option normally on all products.

What can I do if I've gone into arrears?

Contact all companies you are in arrears with to see if you can come to an affordable arrangement with them to help you clear your debts. If this includes The Co-operative Bank, you can contact our support team for tailored guidance to your individual circumstances.

You can also contact specialist charities such as StepChange and Citizens Advice for impartial guidance to help you deal with your debt situation. This may be useful if you've got multiple arrears with different providers and want help and guidance on how best to manage them.

What happens if I use my credit card to pay my bills?

Paying priority bills with a credit card may mean that you're paying more interest which could add to your debt problem. Look into and consider all options carefully, including contacting the companies involved to see what other affordable payment options are available.

We're here to support you

If you haven't found the answer you’re looking for, don't hesitate to ask for help. Seeking support with a financial problem is never easy, but it's an important and courageous first step in the right direction.

If you're a customer of The Co-operative Bank, you can contact our support team to receive one-to-one support.

We'll listen to your situation and work with you to find the right solution. This could include offering a payment arrangement based on your individual circumstances.

As an ethical bank, we also work with a number of charities and organisations that can provide further support to those experiencing financial difficulties and other challenging times. Read about our financial support partners and other helpful services here.

For any other queries and access to more resources, you can also visit our dedicated financial support page.