Despite some recent easing in inflation, the cost of living remains high and many families enter 2026 with little room for manoeuvre.

Borrowing has become a common way to manage everyday costs, from food and energy bills to one-off expenses like an emergency car repair.

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Outstanding consumer credit – the amount households owed on loans, credit cards, overdrafts, and other borrowing – stood above £235bn in 2025, according to Bank of England data, with charities warning that many households have relied on borrowing to plug gaps in their monthly finances.

With consumer borrowing continuing to rise and relatively high interest rates keeping repayments expensive, experts say now is a crucial moment to reassess spending, support and repayment plans.

Here, we take a look at what people can do to regain control of their money in 2026, with a particular focus on tackling debt.

1. Start with a personal budget

Simon Trevethick, head of communications at StepChange debt charity, said many people underestimate the importance of budgeting when it comes to tackling debt.

Speaking to The i Paper, he said: “The starting point for anyone to get on track in 2026 is a personal budget – this might seem simple and obvious, but our polling found that over half of people have never used a budgeting tool to manage their finances.

“You need to assess what your essential costs are, any additional costs, and how that looks when compared with your income.

“Once you have done this, you can determine where savings can be made across your expenditure to look to pay down debt or start saving for a rainy day.”

Debt advisers say even a basic breakdown of income and outgoings can help people identify areas where spending can be reduced, freeing up money to put towards high interest borrowing.

2. Check you are getting all the support you are entitled to

Rising living costs – with inflation currently sitting at 3.2 per cent – have also pushed more households into arrears on essential bills such as council tax, rent and energy.

Recent StepChange analysis showed that people already struggling with debt were increasingly falling behind on multiple bills at the same time, worsening their overall financial position.

Trevethick said support is often available but not always claimed, adding: “It’s also worth seeing if you’re entitled to any benefits or a reduction in bills to help maximise your income – this may be a reduction in council tax, additional benefits, or discretionary support.”

The charity has a useful benefits calculator tool to help you do this. You can also reach out to lenders and utilities providers who may have schemes or funds to support you where you are struggling to cover your essentials.

Securing reductions or temporary support can help stabilise household finances and prevent further borrowing to cover everyday costs.

3. Engage with lenders and providers early

Avoiding contact with creditors – those lending money – when things go wrong, can make financial problems worse.

Regulators require lenders, energy companies and other essential service providers to offer support to customers in difficulty, but many people only seek help once arrears have built up.

Early engagement can lead to better outcomes, Trevethick said.

Support may include temporary repayment plans, breathing space schemes or reduced payments, depending on individual circumstances.

4. Focus on clearing the most expensive debt first

According to Bank of England data, consumer borrowing is growing at its fastest pace since before the cost of living crisis, driven largely by credit cards and unsecured loans.

These forms of borrowing typically carry the highest interest rates, making them particularly costly over time.

Debt advisers generally recommend prioritising these balances once essential bills are covered.

Even modest increases in repayments can significantly reduce the amount of interest paid and shorten the life of a debt.

5. Use free debt advice if things feel overwhelming

For people juggling multiple debts across different lenders, specialist advice can help bring structure and clarity.

Free debt advice services provide independent support and do not affect credit scores.

Trevethick said: “You can also reach out for free debt advice, which is independent, impartial, and does not impact your credit score, from a debt advice provider like StepChange.

“Throughout this process, our online, advisor backed journey will be on hand to assess your situation and put you on the road back to financial health.”

6. Build habits that reduce reliance on credit

Once immediate pressures begin to ease, advisers stress the importance of longer-term habits to prevent future debt problems.

Regular budget reviews, cancelling unused subscriptions and building even small emergency savings can reduce the need to rely on credit when unexpected costs arise.

With borrowing levels still high and household budgets stretched, experts say 2026 will be a critical year for many trying to regain control of their finances.