DMP and savings advice: what to prioritise

Hello! Newbie here!

To cut a long story short......due to COVID job loss and a string of unlucky life events I found myself in quite a bit of credit card debt 3 years ago. I decided to contact StepChange to start a debt management plan which has been a great relief and got me back on track.

I'm now in a much more secure (but still not well-paid) career where I've been able to pay towards my DMP and save alongside this. I do have a few derogatory remarks on my credit file which I was prepared for but the interest on my accounts has been frozen and I'm no longer contacted by the credit card companies at all. This has been a huge help and I'm now over the halfway mark with paying everything off.

My question is: should I be saving at all or concentrating on paying *more* towards my debts via my DMP? At the moment, any excess income I make goes in equal amounts towards a savings pot, which I don't touch, and towards my DMP. I am never realistically going to be able to afford a mortgage in my lifetime and my savings are at a point where I've factored in other life disasters and then some. 

So should I now concentrate on getting my debt down?


  • kimwp
    kimwp Forumite Posts: 1,473
    1,000 Posts Third Anniversary Photogenic Name Dropper
    As you've got an emergency fund and no interest is being charged on your debts, it would probably make sense to save the extra money in order to make full and final offers at much less than you owe.
    Statement of Affairs (SOA) link:

    For free, non-judgemental debt advice, try: Stepchange or National Debtline. Beware fee charging companies with similar names.
  • sourcrates
    sourcrates Forumite, Ambassador Posts: 27,690
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    Agree with the above, one great advantage of debt management is being able to save an emergency fund, a pot of money saved from your disposable income.

    DMP`s may run for many years in a lot of cases, but usually once a debt purchasing company has held your account for a while, the settlement offers will start rolling in, the longer they have your account on their books, the larger the discounts tend to be.

    So the idea is to be able to settle outstanding debts, by taking advantage of these offers, thus reducing the time your in debt, and of course saving you some cash.
    I’m a Forum Ambassador and I support the Forum Team on the Debt free wannabe, Credit file and ratings, and Bankruptcy and living with it boards. If you need any help on these boards, do let me know. Please note that Ambassadors are not moderators. Any posts you spot in breach of the Forum Rules should be reported via the report button, or by emailing [email protected]. All views are my own and not the official line of MoneySavingExpert.For free non-judgemental debt advice, contact either Stepchange, National Debtline, or CitizensAdviceBureaux.Link to SOA Calculator- The "provit letter" is here-
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