How to prioritise your bills

Paying your priority bills first is common debt advice. But identifying them can be easier said than done.

Should you pay the ones you know you can clear in one go? Should you focus on the ones from the companies that send the most reminders? Or should you be taking a completely different approach?

We’re talking about all the different bills you might have, which ones are considered priority debts and why, and what to do if you’re struggling.

What are priority bills?

Priority bills and debts are ones which could affect your home or health, lead to legal problems, or result in further debt from fines if they aren’t paid.

Across the UK, priority bills include, in no particular order:

Mortgage
Secured loans
Rent
Council Tax (called “rates” in Northern Ireland)
Gas and electricity bills
Phone bills
TV licence
County Court Judgments (CCJs), called Decrees in Scotland
Car finance, hire purchase agreements and logbook loans
Fines issued by a magistrate’s court (including criminal fines)
Tax, VAT and National Insurance
Child maintenance

This means that non-priority bills include (again in no particular order):

Water (with some exceptions)
Credit cards
Overdrafts
Personal loans
Payday loans
Store cards
Catalogues
Penalty Charge Notices (PCNs) such as parking tickets
Overpayment of benefits (with the exception of tax credits)
Money owed to family or friends

However, even though these bills are classed as non-priority bills, you still need to pay them. If you fail to pay a non-priority bill, then action by your creditor could turn it into a priority bill.

What happens if I don’t pay my bills?

What happens if you can’t keep up with your payments depends on who you owe money to. Common consequences of failing to pay a bill include:

Debt collection agencies being appointed to recover a debt
Bailiffs visiting your home and taking your possessions to repay a debt
CCJs being taken out against you
Information being recorded in your credit history, which can affect your credit score for up to six years

Priority bills also come with further, more serious consequences of non-payment. Depending on the bill, you could face:

Repossession of your home (if you’re a homeowner)
Eviction from your home (if the bill is rent)
Repossession of another item that credit is secured against (for example, your car)
Being disconnected from essential services such as gas, electricity or a phone line
Money being deducted from your wages or benefits (called an attachment of earnings)
Bankruptcy
A charging order being placed against your property

It is illegal to fail to pay some priority bills. These are Council Tax, other taxes and National Insurance, TV licences and child maintenance. You could be prosecuted if you don’t pay these bills. This could lead to some of the consequences listed above, fines, or in rare situations, being sent to prison.

Where to get help if you’re struggling

If you’re struggling to pay any bill, regardless of its priority, speak to the person or company you owe. Most organisations can offer a range of solutions that could help nip the situation in the bud while you get back on track. These may include:

Freezing interest and charges
Offering you an alternative product or tariff that better suits your circumstances
Providing you with a grace period to seek debt advice
Setting up a repayment plan that you agree is affordable for you
Offering you the chance to settle your debt without repaying it in full

If you’re not sure where to begin with tackling what you owe, then independent debt advice could help. You can access this for free from these organisations:

Sources:

Disclaimer: We make every effort to ensure content is correct when published. Information on this website doesn't constitute financial advice, and we aren't responsible for the content of any external sites.

Helen Fox

Personal Finance Editor

Helen is a personal finance editor who’s spent 11 years (and counting!) in the finance industry. She creates content on everything money with the goal of getting people thinking – and talking – about their finances in ways they may not have done before.