Three quarters of UK consumers are worried about how to cover rising prices - Sarah Coles

As time goes on, once we’ve cut spending to the bone and spent our savings, there’s a growing risk we’ll either borrow more, or miss important bills.

In late December and early January, more than one in five people were borrowing more than they did at the same point a year earlier.

Our research shows us that typically, the lion’s share of debt is owed by wealthier people, who borrow more – and more as a percentage of their income. They’ve tended to feel more comfortable about borrowing, because they’re confident their income will cover the cost.

This isn’t necessarily anything to worry about, but it’s vital not to be blasé about borrowing, even if you can comfortably afford your repayments. It only takes a bolt from the blue – like illness or redundancy – and you could suddenly find that your debts feel far less benign. It’s worth thinking carefully about your borrowing, and how you would manage if life took a turn for the unexpected.

However, the most recent wave of the HL Savings & Resilience Barometer found that debts are mounting across the income spectrum – and that there are now worrying numbers of people on lower incomes who are borrowing too much.

Around a third of people in the second and third quintiles (who only make more than the bottom fifth of earners) score ‘poor’ or ‘very poor’ for debt resilience.

We know this group are less likely to be borrowing because they feel on top of their ability to repay - and more likely to borrow because they don’t feel they have any other choice.

Borrowing feels like an answer to the growing headache of how to pay the bills, and in the short-term it is.

The problem is that over the longer term as your debts mount, and you face higher interest payments on top of all your other costs, it becomes even more difficult to make ends meet.

The lowest earners may well be desperate to borrow, as their expenses rise beyond their reach.

However, they often find it harder to persuade anyone to lend to them. Bank of England statistics show that banks are making it more difficult to take out things like loans and credit cards, because they’re worried that people will struggle to make repayments as times get even tougher.

Anyone who cannot borrow – or who has maxed out all their available borrowing - is left with even fewer options.

It’s one reason why more people have started missing bills. Almost one in ten people (8 per cent) had a direct debit, bill or standing order they’d been unable to pay in the previous month, which rose to one in ten (10 per cent) of those aged 16-29, and an alarming 13 per cent of those aged 30-49.

Unfortunately, missing bills is even more problematic, and the longer you struggle for, the worse it gets. You’ll be chased by the organisation you owe money to, and may run up fees and charges.

You might also lose vital services from the companies you’re in debt to, and depending on the bills you miss, and how long you go before repaying, there may also be court cases and costs plus bailiffs, and a horrible level of stress and worry.

It means that as soon as you see a problem, it’s worth getting help. If you’re struggling with debt payments, your first port of call is your lender. You don’t have to wait until you’ve missed payments: you can talk to them even when you see problems looming.

They have a duty to try to support people who are struggling and agree a more manageable repayment arrangement and reduced charges and fees. If you can’t pay anything for a short period, they may even agree to that.

If this feels like walking into the lion’s den, you might prefer to talk to a debt charity, like StepChange, who can talk to lenders for you.

The FCA research found that four in five people who used debt advice would recommend it (79 per cent), and 70 per cent said it was better than they expected.

If you have missed bills, or you’re worried that you will, talk to your providers, explain the situation, and see whether you can work out a repayment schedule that you can afford. You should also be offered the chance to switch to a cheaper tariff – if there’s one available - to keep your costs down in future.

If it’s an energy bill, check whether you qualify for any grants or help from your provider – who has a duty to help people who are really struggling .

It’s also worth approaching charities, like Citizens Advice, who will know of all the help available nationally – and in your area. They can help you claim additional benefits, which can make an enormous difference.

If you’re entitled to means tested benefits this will also open the door to more cost-of-living payments from the government, so you could get £301 in the spring.

It’s not always easy to ask for help. FCA figures show that more than half of struggling borrowers (52 per cent) waited more than a month before asking for help, partly because they were too embarrassed to tell anyone they were in trouble. More than half of them (53 per cent) said they wish they’d done it sooner. So if you find yourself running out of road this winter, it may well be worth talking to someone about it sooner rather than later.

Food and drink feeds inflation

Figures out this week showed that inflation was at 10.5 per cent, with falls in fuel prices offset by the rocketing cost of food and drink – which was up 16.8 per cent in a year. There were more painful hikes in the price of some of the key essentials, including low fat milk up 46 per cent, sugar up 39 per cent, cheese up 33 per cent, and pasta and eggs both up 29 per cent. Olive oil was also up 40 per cent - although whether or not you class it as an essential depends enormously on how you tend to cook.

Prices are rising at every stage in the food supply chain. Farms are under enormous pressures from hikes in the cost of everything from animal feed to fertiliser. Meanwhile, processing and packaging also costs more, especially for energy-intensive processes like pasteurisation and anything requiring increasingly expensive plastics. Then retailers add extra costs of their own - from staff to heating and lighting the store – and running enormous fridges and freezers. It all adds up, and the food industry is warning that there are no signs of these pressures easing in the near term.

SARAH COLESSenior Personal Finance Analyst and Podcast Host for Switch Your Money OnHargreaves Lansdown