We’re now more than halfway into 2025, and many Brits have already experienced financial turbulence this year, from increasing energy bills to higher-than-affordable mortgage rates. And our financial challenges are far from over, as most UK households continue to struggle to meet the rising costs of living. 

To stay afloat in these challenging circumstances, it may be suitable for you to look into a work loan or go into your overdraft. But if you’re feeling overwhelmed by debt and you aren’t sure what to do, don’t panic—there’s always a way forward.

If 2025 is the year you want to finally take charge of your finances (even if there are only five more months to go), then this article is for you. Let’s discuss the various options available for you to deal with debt effectively in 2025

Prioritise What You Owe

The first and most important step is sorting and prioritising your debts. As much as you probably want to avoid your debts and hope they’ll go away, you need to work out who you owe, the total amount you owe, and the payment deadlines.

By classifying your debts according to priority and dealing with them in the right order, you’ll avoid the serious consequences of not paying them. Your priority debts should include:

• Rent
• Mortgage
• Energy bills
• Council tax

Once you’ve dealt with these impending debts, try to make the minimum payment on every other debt you have each month. Next, pay off the liabilities on which you have to pay the most interest and charges. Whether you have pending credit card bills or an outstanding personal loan, addressing your debts in a phased manner will help you avoid default charges, which can hurt your credit score.

Make sure you tick off this step first in your 2025 plan to manage debts.

Cut Your Credit Costs

Statistics by The Money Charity revealed that as of June 2025, the average total debt per UK household, including mortgages, was a whopping £66,910. Of this amount, credit card debt averaged at £2,611 per household.

This signifies the natural tendency most people have: to rely on credit cards to tide them over any additional expenses. This habit can quickly pile on a longstanding debt if you’re unable to pay what you owe in full.

But there’s a way out. You can often cut the cost of repaying this debt by moving it to a no-fee balance transfer credit card. This allows you a period where you don’t pay any interest on balances you transfer to the card, with some providers offering an interest waiver period of up to two years.

Though using a no-fee balance credit card doesn’t reduce your existing debt, it does reduce the pressure of paying monthly interest on top of your existing debt payments.

To put it simply, the balance transfer credit card allows you to pay off your credit card debt without taking on any interest. Just keep in mind that you may need to pay a fee for moving your credit card balance.

Move Your Bank Account

Some banks offer a switching bonus when you move your accounts. This is an easy way to earn some cash that you can use towards paying off what you owe. Switching to a new bank account can also mean lower fees, higher earnings through interest, and access to better features. Banks can offer anywhere from £150 to £200, sometimes even more, provided you fulfil certain conditions.

Online/app-based banks are more likely to offer switching bonuses and attractive interest rates on current account balances. It’s well worth considering migrating your money to a new bank if it could potentially put more earnings in your pocket for the rest of the year.

These deals don’t come by often, and nor do they last very long; usually for a few weeks or months at most. So, if you find a deal that seems worth the switch, it’s best to act quickly.

Also, bear in mind any additional monthly fees that your new bank may charge.

Revisit Your Budget

Something as simple as revising your budget can have a lasting impact on your finances. 

If it’s been a while since you’ve done any budgeting, take this as your sign to revisit and rework how you’re managing your income and expenses. Go through your accounts to take a fresh look at how you’re spending your money, and identify where you can cut back.

Not all bills can be reduced, but there are ways to prevent overspending and bring in more income. Here are some tips to get a fresh perspective:

• Check for direct debits for things you no longer need or use
• Switch to a cheaper supermarket to reduce food bills
• Claim any social benefits you’re entitled to
• Sell unwanted items like clothes and household items on online marketplaces for extra cash

If you struggle to keep track of your expenses and budget, use an app or online tool to manage your spending and earnings while keeping your budget on track.

Speak to the Experts

If you’ve tried all of the above and you’re seeing little to no change, it might be time to reach out to experts who can guide you in debt matters. 

Charities like StepChange, Citizens Advice, and the National Debtline can all offer you advice on dealing with debt. Using their services, you’ll get a chance to talk to people who can help you, without any judgment.

In Conclusion

Going into debt does not have to be the worst thing that can happen to you financially. As long as you understand your debt, you can take control and devise a strategy to get out of it. Begin taking these steps today and feel the weight start to lift.