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Managing your borrowing

While we may read or see many scary stories in the media, debt can be positive and useful when it’s necessary. And if managed carefully, making sure you don't become over-burdened and that you make all of your monthly repayments, it can be affordable.

Common types of debt are: a mortgage for buying a house; a loan on a car; or using credit cards for larger items or for regular purchases to gain rewards.

Even if you have your debts under control, it's vital to understand what you owe and how much it's costing you. This will help you make sure your borrowing remains affordable and also enable you to identify where you may be able to make savings. All of which can help you feel more in control of your money and help you build your credit profile.

Is paying off debts one of your long term financial goals?

We found that 63% of people we asked say paying off debt is one of their long term financial goals. *The Fidelity Global Sentiment Survey, 2021

How does debt work?

Simply put, debt is when you borrow money – usually from a bank or a credit provider – under the condition that it must be paid back at a later date, normally with interest. The interest you’ll pay will usually be expressed as a percentage (the Annual Percentage Rate or APR), and this is the cost you pay each year to borrow the money, including any fees or other charges. It’s important to make sure that you can afford to make the repayments, including the interest, before you borrow money.

Different types of debt

Secured debt
Unsecured debt

How to prioritise your payments

It's important to ensure you are meeting all your debt obligations. Knowing which to pay off first can help you save money, clear your debts faster, and help to improve your financial wellbeing.

MoneyHelper, which provides free impartial guidance, breaks debts down into three categories:

  • Priority debts - these carry the most serious consequences if you don’t pay them
  • Non-priority debts - the consequences of not paying these are less serious
  • Debt emergencies - you should get free, independent advice urgently if you’re facing a sudden emergency like court action, bailiff action, disconnection, or eviction.

The Government's free and impartial MoneyHelper service can help you find free debt advice across the UK and help you to prioritise your debts. You can find out more by going to

Need someone to talk to about your finances?

If you’re struggling with debt, it can be hard to know where to turn. But you don’t need to struggle alone. There are lots of free and confidential advice services available across the UK.

A quick summary on debt

  • Understand your debts and list them out by the amount you owe and the interest you are paying
  • Ensure you're meeting all the minimum requirements and then prioritise your debts
  • Seek help immediately if you are having difficulty with repayments.


* The Fidelity Global Sentiment Survey, 2021. The sample consisted of respondents with the following qualifying conditions: aged 20-75, either they or their partner were employed full-time or part-time and had a minimum household income of £10,000 annually. The data collection, research and analysis for the above markets was completed in partnership with Opinium, a strategic insight agency. Data collection took place between July 2021 and August 2021. Reporting and analysis took place between August 2021 and October 2021.