Behind on Bills? Which Bills to Pay First in England

If you are behind on bills and can’t pay them all, pay the priority ones first. These are the debts that can cause the most serious problems if you ignore them: losing your home, a court case or your energy being cut off. In England, Citizens Advice puts rent, council tax, gas and electricity, phone and internet and your TV licence on that list. Credit cards, payday loans and even your water bill come after. And free help exists: talk to a debt adviser as early as you can.

This guide applies to England. Scotland, Wales and Northern Ireland have their own rules, and Citizens Advice has separate pages for each.

The trap: paying whoever shouts loudest

When money is short, it is natural to pay the company that calls most often or sends the angriest letter. That might be a credit card or a loan. Meanwhile the council tax letters go in a drawer, because the council is quieter.

That order can backfire. How loudly a creditor chases tells you little about what happens if you don’t pay, and some of the quiet ones can end in court.

Priority debts in England

Citizens Advice defines priority debts as “debts that can cause you particularly serious problems if you don’t do anything about them”. Its list for England:

• rent arrears
• mortgage arrears or secured loan arrears
• council tax arrears
• gas or electricity bills
• phone or internet bills
• TV licence payments
• court fines
• overpaid tax credits
• payments for goods bought on hire purchase or conditional sale
• unpaid income tax, National Insurance or VAT
• unpaid child maintenance

What can happen if you don’t pay them

• Rent. Your landlord might try to evict you. Before they can, they need a possession order from the court.
• Council tax. The council can take you to the magistrates’ court. Citizens Advice says you won’t go to prison if you can show you can’t pay; that risk is for people who can pay and choose not to.
• Gas and electricity. Your current supplier might cut off your supply. You should still arrange to pay what you owe.

Non-priority debts

These still have to be paid, but they come after the list above. Citizens Advice gives these examples:

• credit card or store card debts
• catalogue debts
• unsecured loans, including payday loans
• unpaid water bills, because your water supplier can’t cut off your water supply
• overpayments of benefits, apart from tax credits
• unpaid parking tickets
• money you owe to family and friends

Citizens Advice also suggests asking your other creditors to stop chasing you while you deal with your priority debts.

A step-by-step plan

1. List everything you owe. Every bill and debt, the amount, and how far behind you are.
2. Mark the priority debts. Use the list above.
3. Work out what you can pay. Write down your income and your essential spending, and see what is left.
4. Pay or arrange the priority debts first. Contact each one and ask for an arrangement you can afford. For council tax, GOV.UK says the council can help, for example by spreading your payments over 12 months instead of 10.
5. Tell the non-priority creditors. Explain your situation and ask them to hold off while you deal with the priority debts.
6. Get free debt advice. Before you sign up to any plan, talk to an adviser.

Breathing Space: 60 days to make a plan

If you live in England or Wales, Breathing Space can give you temporary protection from your creditors while you get debt advice and make a plan.

• How long: up to 60 days. If you are receiving mental health crisis treatment, it lasts for that treatment plus 30 days.
• What it does: enforcement action can’t be taken against you, creditors can’t contact you about the debts included, and they can’t add interest or charges to those debts.
• How to get it: talk to a debt adviser, who applies for you if it is right for you. Only a debt adviser authorised by the Financial Conduct Authority, or a local authority that gives debt advice, can start it.
• Cost: applying is free, though GOV.UK notes some debt advisers may charge a fee.
• Who can’t use it: people who already have a debt relief order, an IVA or an interim order, or who are an undischarged bankrupt.

Where to get free help

• Citizens Advice helps if you are struggling with priority debts or have more than one and need help deciding which to deal with first. Contact your nearest Citizens Advice.
• StepChange describes itself as the UK’s leading debt charity and says its advice is always free and impartial.
• National Debtline is a free debt advice charity run by the Money Advice Trust, offering confidential and independent support, with separate advice for England and Wales and for Scotland.
• Breathing Space (England and Wales) can pause most enforcement action and freeze most interest and charges for up to 60 days. A debt adviser starts it for you; see the section above.
• MoneyHelper lists free debt advisers; GOV.UK points to it in its Breathing Space guidance.

Free advice is available, so be wary of paying for debt help you could get without charge.

Once you are back on track

Falling behind often starts with a bill that came out on a bad day or a letter that got missed. Once your priority debts are under control, put every bill on one list with its date and set a reminder before each. A bill tracker like Billo keeps each bill and its due date in one place and reminds you 3 days early, so nothing goes back in the drawer. Our guide to bills before payday shows how to move bills to dates that suit your pay.

This guide is general information, not personal financial advice. For advice about your own situation, contact Citizens Advice or a free debt adviser.