Cost of living help for individuals

Rocket Lawyer is here to support you during the cost of living crisis. We can answer your questions about work arrangements and taxes as well as questions on energy bills and payments and on how to supplement your income.

If you have questions about business matters, read our Help for businesses facing rising costs.

The energy price cap is a cap (ie a maximum price limit) on the price energy suppliers can charge you per unit of energy (eg electricity or gas) that you have used. How much you pay will depend on how much energy you use.

The energy price cap is calculated by Ofgem, which regulates energy suppliers in the UK. The energy cap is a governmental protection, which ensures that energy suppliers’ profits are capped at a certain amount.

In October 2022 the Government introduced the Energy Price Guarantee (EPG), to provide relief from rising energy prices. Under the EPG the maximum amount an average household in the UK will pay for energy is limited. Between 1 October and 31 December 2023, the price cap is £1,834. From 1 January 2024, the price cap will rise to £1,928 per year.

For more information, see Ofgem’s guidance.

If you are struggling to pay your energy bills, consider reaching out to your energy supplier and asking them for assistance. As a matter of law, energy suppliers must take your individual circumstances into account in relation to your energy bills. This means that, if asked, your energy supplier must:

• consider giving you more time to pay an energy bill or debt

• consider giving you a payment break or payment reduction

• review your current payments (including any debt repayments) to ensure that they are correct and up-to-date

• cooperate with you to agree on an affordable Repayment plan (if you owe money)

• ​​provide advice on how to access hardship funds (ie charitable grants) and on how to use less energy

• help you with priority service registration, to provide you with access to support with energy-related tasks (eg meter reading)

For more information, see our Energy saving checklist.

If you are behind on your energy bills, consider using an Energy repayment plan to request a repayment schedule that works for you. Make sure that your energy repayment plan explains that you are behind on paying your energy bills and clearly sets out why you are requesting a repayment schedule. As energy providers are required to take your circumstances into account when dealing with your energy bills, it is essential that your document reflects your actual circumstances.

Having a clear and affordable debt repayment plan for your energy bills in place can help you to repay money owed without financially straining yourself too much.

There are various steps you can take to reduce your energy bills. Examples include:

• making changes around your household to reduce your energy consumption. For example, switching to energy-saving light bulbs, turning appliances off at the wall, using your appliances more efficiently (eg only using dishwashers when they’re full) and only turning on your heating or air conditioning/fans when they’re needed

• making physical changes to your property (eg by replacing old boilers, draught-proofing or adding insulation). If you own your own home you may be able to get financial support. If you rent your home, you can speak to your landlord about making such improvements

• seeking specialist advice. Tailored advice (eg from a charity like WASH or an organisation like Energy Saving Trust) can help you with your specific needs

For more information, see our Energy saving checklist. Consider using an energy efficiency calculator to help you find ways to reduce your energy usage.

If your tenant (or contract holder) is late paying their rent, it is important that you take action as soon as possible. By doing this you help prevent your tenant or contract holder from accruing rent arrears (ie overdue rent) and help prevent issues further down the line. 

If a rent payment is late, speak to your tenant or contract holder as soon as possible to establish why the rent hasn’t been paid. For example, the delay may have been caused by technical issues (eg bank systems not working). Most tenants or contract holders will respond quickly when reminded about a missed payment. However, if they do not respond, consider using a Rent demand letter to formally request immediate payment. If you do not receive a response, use a Final rent demand letter before taking further steps (eg eviction).

If your tenant or contract holder is temporarily unable to pay their rent, you can consider granting a temporary rent reduction or entering into a Rent repayment plan. Whether or not you wish to provide such relief will typically depend on your tenant’s or contract holder’s circumstances and your relationship with them.

For more information, read Managing residential rent arrears.

If your commercial tenant (ie a business renting commercial premises) is experiencing difficulties paying the rent, read Help for businesses facing rising costs.

If your tenant is unable to pay their rent, you may be able to end their tenancy following the correct eviction notice period. 

In England, you may be able to issue a Section 21 (form 6A) notice for England giving 2 months’ notice if the fixed-term of the tenancy has come to an end. For more information, read Repossessing property - section 21 notices. If you need to evict a tenant during the tenancy’s fixed-term you may be able to do so in reliance on certain legal grounds (eg rent arrears) using a Section 8 notice for England. For more information, read Repossessing property - section 8 notices.

In Wales, you may be able to evict a contract holder using a Section 173 notice for Wales if you do not have a specific ground for eviction. How much notice you must give depends on the type of contract being ended, however, it will either be 2 or 6 months. You may be able to evict a contract holder using a Serious rent arrears eviction notice for Wales if the contract holder is in serious rent arrears (eg if the at least 2 months’ rent is unpaid when rent is paid monthly). You must give contract holders at least 14 days’ notice under a serious rent arrears eviction notice. For more information, read Repossessing property in Wales.

In Scotland, tenants can only be evicted under a legal ground for eviction. While a moratorium on evictions is currently in place, this does not apply in certain circumstances, including where:

• a private landlord needs to sell a property because of financial hardship (financial hardship must be assessed by the First-tier Tribunal for Scotland (Housing and Property Chamber) based on the landlord’s financial situation)

• a private landlord needs to live in the let property due to financial hardship

• the tenant is in substantial rent arrears (ie at least 6 months’ rent is unpaid)

For more information, see the Scottish Government’s website.

You may also wish to grant a temporary rent reduction or make a Rent repayment plan if your tenant (or contract holder) is temporarily unable to pay their rent. For more information, read Managing residential rent arrears.

There are currently no eviction bans in place in England and Wales. This means that tenants (or contract holders) need to continue paying their rent to avoid eviction. If you are struggling to pay your rent, speak to your landlord and make them aware of the difficulties you are facing. Your landlord may agree to give you more time to pay your rent or may agree to a rent reduction. Any agreement with your landlord should be put in writing. 

If you fall into rent arrears, you and your landlords can agree on a Rent repayment plan based on your individual circumstances.

Note that the situation is different in Scotland, where there is a moratorium on evictions. This means that private tenants in Scotland are offered greater protection as the moratorium prevents the enforcement of eviction orders or decrees for up to 6 months. There are a limited number of exceptions to this moratorium (eg if the tenant has engaged in antisocial behaviour or where the landlord needs to live in the property).

In England and Wales, there are currently no rent caps in place for private residential tenancies. This means that your landlord can technically increase your rent. However, they can only do so by following the correct process. For example, in England, rent can only be increased during a tenancy agreement’s fixed-term if the tenant agrees. For more information, read Private renting rent increases in England and Variations of rent in Wales.

In Scotland, a rent cap is currently in place. This is set at 3% (apart from in limited circumstances) and is expected to remain at that level until at least 31 March 2024. This means that, generally, landlords in Scotland can raise tenants’ rent by no more than 3% of their current rent. For more information, read Private renting rent increases in Scotland.

Lodgers are not covered by the same rules as tenants or contract holders (for more information, read Taking in a lodger). The process for evicting lodgers remains the same despite the cost of living crisis. This means that, as a lodger, you can be evicted more easily than tenants or contract holders. For more information, read How to evict a lodger and Evicting lodgers in Scotland.

You can generally request a pay raise at any time. However, it is important to carefully consider the timing of your request and your reasons for requesting the increase. If you are struggling due to the rising cost of living, consider speaking to your employer about this - they may be able to provide financial support (eg a cost of living bonus or a salary/wage increase in line with inflation). 

If you want to formally request a raise, consider using our Pay rise request letter. This document is designed to be used when you are requesting a raise based on your performance. However, the letter allows you to specify that you are also requesting a raise due to the rising cost of living.

If you have been laid-off or put on short-time working you are entitled to full pay for days on which you do not work at all unless your contract says otherwise or you agree to another arrangement. If your contract allows for unpaid lay-offs or short-time working, you are entitled to 'statutory guarantee pay' (or simply ‘guarantee pay’). This is the minimum amount your employer must pay you during unpaid lay-offs or short-time working. Note that your employer may offer enhanced guarantee pay (ie more than the legal minimum) instead of statutory guarantee pay.

Guarantee pay is currently limited to £35 a day for 5 days in any 3-month period. This means that the maximum amount of statutory guarantee pay you’re entitled to within a 3-month period is £175. If you normally earn less than £35 per day, you will get your usual daily rate instead. If you work part-time, your statutory guarantee pay is worked out as a proportion in relation to your part-time hours.

To be eligible for statutory guarantee pay, you must:

• be an employee (ie not a worker)

• have been continuously employed for at least 1 month

• reasonably make sure you’re available to work

• not refuse any reasonable alternative work

• not have been laid off because of industrial action (eg strikes)

If you are not eligible for statutory guarantee pay, you may be able to claim support from the Government (eg Universal Credit or New Style Jobseeker's Allowance). For more information, see the Government’s guidance.

If you have been laid-off or put on short-time working you may be able to apply for redundancy (and redundancy pay) in certain circumstances. You will typically be able to do this if you’ve been laid-off or put on short-time working and have received less than half a week’s pay for at least 4 weeks in a row or 6 weeks in a 13-week period.

To apply for redundancy, reach out to your employer in writing to claim redundancy. This must be done within 4 weeks of the last day of your lay-off or short-time working period. Your employer then has 7 days to either accept your redundancy claim or provide you with a written counter-notice. The latter means that your employer believes that work will soon be available for you. This work must start within 4 weeks of the counter-notice and must last for at least 13 weeks. If your employer does not give you a counter-notice, they are considered to have accepted your redundancy claim.

For more information, read the Government’s guidance and do not hesitate to Ask a lawyer.

If you disagree with a decision made by your employer (eg their decision to dismiss you for redundancy) you have the right to appeal. You should check your employer’s Grievance procedure for details of the appeals process. If such a procedure isn’t in place, follow the Acas Code of Practice on disciplinary and grievance procedures. However, the first step will typically involve sending an Appeal letter to your employer. Your employer should then arrange an appeal hearing. If they fail to do so, you can consider taking legal action by, for example, raising a case in an Employment Tribunal.

For more information, read Appealing decisions made by employers and Ask a lawyer if you have any questions.

If you believe that you have been treated unfairly at work (eg if you feel that you have been bullied or discriminated against), you should consider raising a grievance. A grievance is a formal complaint made by an employee to their employer. You can raise a grievance using a Grievance letter under your employer’s grievance procedure or, if such a procedure doesn’t exist, the Acas Code of Practice on disciplinary and grievance procedures. Your employer should then arrange a meeting to discuss your grievance. If they fail to do so, you can consider taking legal action by, for example, raising a case in an Employment Tribunal. For more information, read Employee grievances and raising grievances.

If you feel that your employer’s conduct has significantly breached your employment contract (eg because of a sudden demotion), you can consider yourself constructively dismissed and can resign using a Constructive dismissal letter. Constructive dismissals cover situations where employees feel that they have no choice but to resign because of their employer’s unreasonable conduct. You may then be able to bring a constructive dismissal claim in an Employment Tribunal. For more information, read Constructive dismissal.

Starting your own business can be a great way to supplement your income. Before starting your business, there are several things you should do. These include:

• deciding on what your business will do. Before you can start your business, you need to know what goods and/or services your business will provide 

• choosing your business structure. Whether you operate as a sole trader, partnership, private limited company (LTD) or limited liability partnership (LLP), your choice of business structure will affect the amount of tax you and/or your business will pay and will determine whether you are eligible for certain tax reliefs and grants

• choosing a name for your business. Make sure that your proposed name doesn’t infringe on another business’ trade mark by searching the UK Intellectual Property Office’s Trade Marks Register

• establishing an online presence. If you will be running an online business, make sure to secure a domain name and establish a presence on social media, reflecting the nature of your business

For more information, read How to set up your business. For more information on different types of businesses, read our guidance on:

• Running a micro-business

• Starting an event planning business

• Starting a tourism business

• Selling cosmetics

• E-commerce

• Legal considerations when starting your Etsy shop, and

• Key legal considerations when setting up an Amazon UK store,

• and read our Run a business online checklist

Ask a lawyer if you have any questions about starting your own business.

The documents your business needs depend on the specifics of your business. However, in most circumstances, you should consider making:

• Terms and conditions outlining the standard terms that apply to your business transactions. For more information, read Terms and conditions and How to choose the right terms and conditions

• a Website privacy policy (if you have a business website) setting out how you handle your website users’ personal information

• a Cookie policy (if you have a business website) informing website users about the cookies used by your website

• Website terms and conditions (if you have a business website) governing the use of your website

• Invoices to provide customers with bills in respect of goods supplied or services rendered

• Purchase orders confirming orders of goods or services by clients

For more information, read Start a business and Run an online business. If you require specific advice on your situation, do not hesitate to Ask a lawyer.

If you want to sell any unwanted items, it’s a good idea to create a formal contract. This can help protect you by providing a clear record of your sale and by offering a potential opportunity for legal recourse if anything goes wrong.

If you are selling a car, consider using a Vehicle bill of sale. This sets out the buyer’s and seller’s obligations and declarations (eg regarding the status of the vehicle). For more information, read Buying and selling a vehicle.

If you are selling personal goods (eg vehicles, electronics or furniture) without warranties (ie promises about the condition of the goods), consider using a Sale of personal goods contract or a Bill of sale. While these documents are similar, a bill of sale is often used to simply document the sale of the item and to legally transfer ownership. On the other hand, a sale of personal goods contract contains more terms and deals with more matters (eg delivery charges). For more information, read Bills of sale.

If you’re lucky enough to have a room spare in your home, consider letting it to a lodger. Before taking on a lodger it’s a good idea to check with your mortgage lender to ensure that you’re permitted to take in lodgers. Similarly, if you’re currently claiming any state benefit payments, speak to your benefits provider (eg Universal Credit), as taking in a lodger may affect the benefits you’re claiming.

When taking in a lodger you should bear in mind the rights lodgers have. While these are more limited than the rights granted to tenants, lodgers do have certain rights you must uphold. For example, lodgers in England and Wales have a right to be given ‘reasonable’ notice if you’d like them to leave. You should also familiarise yourself with the tax implications of renting a room to a lodger (eg the tax-free threshold provided by the Rent a Room Scheme).

Make a Lodger agreement for England and Wales or a Lodger agreement for Scotland to clearly set out the rent, rules and rights you’ve agreed to with your lodger. You can also make House rules for lodgers to clearly communicate your expectations of the person you’re taking into your household.

For more information, read Taking in a lodger.

If you don’t own your home but rent it, you may still be able to take in a lodger. However, before letting out your spare room, you should check your Tenancy agreement (or  Occupation contract in Wales or Private residential tenancy agreement in Scotland) to determine whether you’re allowed to take in a lodger. If your contract doesn’t expressly state whether or not you can let a spare room to a lodger, you should speak to your landlord. Even if your contract does not allow you to take on a lodger, you can consider explaining your situation to your landlord and asking them for permission. For more information, read Taking in a lodger.

If you have a parking space that you aren’t using, you can consider renting it out to someone else. You can rent out your spare parking space using a Car parking licence or you can rent out a spare garage space using a Garage licence.

These documents grant the person you are letting the space to a licence. This is a personal permission to make use of specified premises (eg a parking space). Licences provide fewer rights than tenancies and the licensee (if the person you are granting the licence to) does not have a legal interest in or control over the premises. This makes it easier for you to end the agreement and regain possession of the premises. For more information, read Leases, licences and tenancies.

If you own property that you would like to rent out, make sure that you enter into a written agreement with your tenant (or contract holder). If you are renting out property located in: 

• England - use a Tenancy agreement

• Wales - use an Occupation contract

• Scotland - use a Private residential tenancy agreement

For more information on the different types of tenancy agreements, including your legal obligations as a landlord, read Residential tenancies, Residential tenancies in Wales and Residential tenancies in Scotland. You should also familiarise yourself with the rights and responsibilities of tenants in England and Wales and the rights and responsibilities of tenants in Scotland.

If you are self-employed (or otherwise owe money on Self Assessment), you may be able to set up a payment plan online to pay your income tax bill in instalments. This is known as the Time to Pay service and you can make use of it if you:

• have filed your latest Self Assessment

• owe less than £30,000 in income tax

• are within 60 days of the payment deadline, and

• do not have any other payment plans or debts with HMRC

If you have missed a payment date or cannot set up a payment plan online, you should contact HMRC directly.

If you are experiencing financial difficulties due to the rising cost of living, consider taking steps to reduce your monthly expenses. Some things you can consider doing include:

• budgeting - by making a clear budget you can identify areas where you can cut back on any non-essential expenses (eg subscription services)

• taking steps to reduce your utility bills 

• considering alternative modes of transportation - consider using public transportation, carpooling or cycling to save on transportation costs

avoiding unnecessary debts - try to avoid unnecessary debt, such as high-interest credit cards, payday loans and other types of loans that impose higher than usual interest rates.

Creating a budget is a great way to manage your finances and ensure that you're spending within your means.

The first step in making a budget is to calculate your total income (including your salary, bonuses, commissions and all other income sources, like rental income). 

You should then deduct any expenses. It is a good idea to track your expenses for a few months to get an idea of where your money is going. This will help you identify areas where you can cut back and reduce expenses. It is also a good idea to categorise your expenses into fixed expenses (eg recurring expenses like rent, mortgage or car payments) and variable expenses (like eating out and entertainment costs). Fixed expenses may also be called ‘priority debts’.

To help yourself budget, it is a good idea to set financial goals. These include things like paying off a debt, saving for a house deposit or building an emergency fund. Consider dividing your income between your expenses and financial goals. You should generally prioritise your fixed expenses and financial goals, before allocating remaining income to your variable expenses.

To help yourself stick to your budget, monitor your expenses and income on a rolling basis. Make adjustments as needed and be mindful of overspending in any particular category. You may find that using a budgeting tool (eg the budgeting tool offered by National Debtline) can help you track and monitor your spending.

By improving your credit score you can qualify for better loan rates and credit cards. While improving your credit score takes time and effort, it's worth it in the long run. There are various ways to improve your credit score, including:

• checking your credit report to make sure that all information is correct and up-to-date. You can do this for free with credit reference agencies like Experian, Equifax and TransUnion

• paying your bills on time. Late payments may harm your credit score so it’s crucial that you pay your bills on time

• where possible, avoiding applying for too much credit. Applying for too much credit in a short period of time can have a negative impact on your credit score. Only apply for credit when you need it and make sure to shop around for the best rates

• using credit-builder products. Credit-builder products (like credit-builder credit cards and credit-builder loans) are designed to help you improve your credit score

For more information, read Credit scores and defaults.

If you’re struggling to pay a debt, it is important that you deal with the situation early. Failure to take steps to manage your debts can result in defaults, county court judgements and even bankruptcy, which can have long-lasting effects.

If you are struggling to make payments, or are worried about making repayments in the future, you should speak to the person or organisation to whom you owe money (ie your creditor). Explain your situation, clearly detailing why you are struggling to make the necessary payments, and ask for the other party’s help. It will generally be down to your creditor to decide whether or not they are willing to reduce your payments or interest rates.

If you are facing financial difficulties, you may consider using a Letter proposing payments in instalments to request a different payment plan. If you require a different payment plan for your energy bills, consider using an Energy repayment plan.

Bankruptcy is a type of personal insolvency. A private individual (including a sole trader) is considered insolvent if they have more debts than assets. If an individual is insolvent, they must apply for a private insolvency option. These include filing for bankruptcy or entering into an individual voluntary arrangement. The same applies to partners in partnerships. For more information, read Bankruptcy and Advantages and disadvantages of declaring bankruptcy.