Plain-English guides to budgeting, saving, debt and the latest changes that affect UK households. https://thebudgetclinic.pages.dev/blog/ 2026-10-30T00:00:00.000Z https://thebudgetclinic.pages.dev/blog/avalanche-or-snowball.html 2026-10-30T00:00:00.000Z

Two popular ways to clear several debts, what each one costs, and how to choose. With a worked example.

<p>If you owe money on a few things at once, a credit card, a store card, an overdraft and a car loan, say, the order you pay them off makes a real difference. Here are the two most popular ways to do it.</p> <h2>First, the rule for both</h2> <p>Always pay <strong>at least the minimum on every debt</strong>. Missing a payment usually means fees and a mark on your credit file. Then put every spare pound towards <strong>one</strong> debt at a time. When that one's cleared, its payment rolls on to the next.</p> <h2>The avalanche: highest interest first</h2> <p>Put your spare money on the debt with the <strong>highest interest rate</strong>, usually a store card or overdraft.</p> <ul> <li><strong>Good:</strong> it costs the least in interest, every time.</li> <li><strong>Not so good:</strong> if your most expensive debt is also your biggest, it can be months before you clear anything.</li> </ul> <h2>The snowball: smallest balance first</h2> <p>Put your spare money on the debt with the <strong>smallest balance</strong>, whatever its rate.</p> <ul> <li><strong>Good:</strong> you clear your first debt quickly, which can keep you going.</li> <li><strong>Not so good:</strong> it usually costs a bit more in interest.</li> </ul> <h2>A worked example</h2> <p>Take four debts worth £9,300 in total:</p> <table> <thead> <tr> <th>Debt</th> <th>Balance</th> <th>Interest (APR)</th> <th>Minimum</th> </tr> </thead> <tbody> <tr> <td>Credit card</td> <td>£2,400</td> <td>22.9%</td> <td>£60</td> </tr> <tr> <td>Store card</td> <td>£600</td> <td>29.9%</td> <td>£25</td> </tr> <tr> <td>Car loan</td> <td>£5,500</td> <td>7.9%</td> <td>£180</td> </tr> <tr> <td>Overdraft</td> <td>£800</td> <td>39.9%</td> <td>£30</td> </tr> </tbody> </table> <p>The minimums add up to £295 a month. Paying £395 a month in total:</p> <ul> <li><strong>Avalanche:</strong> debt-free in 28 months, about <strong>£1,605</strong> in interest.</li> <li><strong>Snowball:</strong> also 28 months, about <strong>£1,646</strong> in interest.</li> <li><strong>Minimums only:</strong> over six years and about <strong>£4,358</strong> in interest.</li> </ul> <p>The gap between the two methods is small here. The big saving is paying <strong>anything</strong> more than the minimums: an extra £100 a month saves over £2,700.</p> <h2>Which should you choose?</h2> <p>Pick the one you'll stick to. If you like seeing progress fast, the snowball is fine. If you want the lowest cost, use the avalanche. Either beats paying minimums.</p> <h2>If it feels unmanageable</h2> <p>If you can't cover your minimums, talk to a free debt charity such as StepChange, National Debtline or Citizens Advice before you miss payments. They can help set up a plan and speak to lenders for you.</p> <p><a href="https://thebudgetclinic.pages.dev/useful-links.html#advice">See free debt advice services</a></p> <p><em>This article is general information, not financial advice.</em></p> https://thebudgetclinic.pages.dev/blog/budget-2026-what-it-means-for-you.html 2026-10-29T00:00:00.000Z

Income tax and National Insurance stay frozen, the cash ISA cut is scrapped, savings tax goes up and there's £100 off energy for many homes. Here's what changes and when.

<p>The Budget on 28 October 2026 was more about the next few years than about this one. If you're employed, your pay packet won't change because of it before April. But there are changes to savings, energy bills and help for first-time buyers that are worth knowing about now.</p> <h2>Your pay: no change this tax year</h2> <p>The headline rates of income tax and National Insurance stay the same. The personal allowance stays at £12,570 and the 40% rate still starts at £50,270. Those thresholds are now frozen until 2031.</p> <p>A freeze sounds like nothing happens, but as wages rise more of your pay gets taxed at the higher rates. If your pay goes up, it's worth checking where you now sit.</p> <p><a href="https://thebudgetclinic.pages.dev/take-home-pay.html">Check your take-home pay</a></p> <h2>ISAs: the cash ISA cut is off</h2> <p>The plan to cut the cash ISA limit to £12,000 for under-65s from April 2027 has been scrapped. You can still save up to <strong>£20,000 a year</strong> in ISAs, all in cash if you want.</p> <p>That matters more than before because <strong>tax on savings interest outside an ISA rises from April 2027</strong>, to 24% for basic-rate taxpayers (44% higher rate, 49% additional rate). The Personal Savings Allowance stays: £1,000 of interest a year tax-free for basic-rate taxpayers and £500 for higher-rate taxpayers.</p> <h2>Buying your first home</h2> <ul> <li><strong>Lifetime ISA:</strong> from 29 October 2026 the charge for using it on a home over £450,000 falls from 25% to 20%.</li> <li><strong>First Time Buyer ISA:</strong> from April 2029 it replaces the Lifetime ISA for new savers. It keeps the 25% bonus on up to £4,000 a year but has no upper age limit.</li> <li><strong>Your First Home (England):</strong> from April 2027, an equity loan of up to 20% with a deposit from 2.5%, interest-free for the first five years. Household income caps apply: £110,000, or £140,000 in London.</li> </ul> <h2>Energy bills</h2> <ul> <li>Households in England in <strong>council tax bands A to D get £100</strong> from January 2027, paid through the council tax system.</li> <li>The 0% VAT on household electricity now runs to July 2027, which should take about £50 off the price cap from April 2027.</li> <li>Ofgem has been asked to abolish gas standing charges, aiming for the end of 2027.</li> </ul> <h2>Help to Save gets wider</h2> <p>Help to Save adds 50p for every £1 you save, up to £1,200 over four years. From spring 2028 banks and building societies will offer it, and Universal Credit claimants without earnings will be able to join. If you qualify now, you don't need to wait.</p> <h2>Also announced</h2> <ul> <li>The National Living Wage rises 3.9% to £13.21 an hour from April 2027.</li> <li>The 5p cut in fuel duty is extended to July 2027.</li> <li>Interest on Plan 2 and Plan 3 student loans is capped at 6% until August 2027.</li> </ul> <h2>What to do now</h2> <ol> <li>Use this year's ISA allowance if you have savings outside one, especially before April 2027.</li> <li>If you're saving for a first home, look at whether a Lifetime ISA suits you now.</li> <li>Check your energy deal and watch for the £100 payment from your council.</li> </ol> <p><em>This article is general information, not financial advice. Figures come from the government's Budget 2026 documents.</em></p>