It is important you get advice as soon as you start to build up arrears (missed payments) with your rent or bills. An advice centre can help you sort out your debts, and getting advice can prevent you losing your home or having your heating cut off.

Council Tax

Council Tax is a tax on where you live. Your bill will depend on the value of the room, flat or house you live in and how many people live with you. If you live on your own, you will get a 25% reduction. Those people with the lowest incomes and students will usually pay no council tax as they will be eligible for a 100% rebate. Call your local council to find out where you stand.

Connection charges

You may be asked to pay a connection charge for electricity, gas or the telephone when you move in. It can be pricey unless you're sharing the costs with other people.

Heating bills

You may be asked to pay a security deposit by some electricity or gas companies. There are different ways of paying gas and electricity bills. Ask about these when you move in. Bills are usually paid every three months (quarterly). To make it easier you could open a post office account and put money aside each week towards the bills. But it is also possible to pay monthly: buy stamps each week, use a card meter or have money taken direct from your income support. Check with your gas and electricity company to find out which way is best for you.

Water rates

If you are in a private rented flat, an amount for water rates may be included in your rent. Check this with your landlord, and look at the small print of the contract. If you are getting your rent paid by housing benefit, they will not pay anything towards your water rates, even if it is included in your rent. You will probably have to pay the difference to your landlord. It is usually about two or three pounds a week. Other tenants may have to pay water rates directly to the water company. If you do, contact them to see if you can pay it weekly or monthly.

Telephone bills

The phone bill is the most common source of money aggravation in a shared flat, because you don't split it up equally. You can be charged for a new line being put in, or for reconnection. Horror stories of flatmates calling Australia every night, then doing a runner without paying are very common. Make sure everybody in the house has their name on the bill, and get an itemised bill to prevent disputes over who has to pay the most. If someone does do a runner, notify the telephone company fast, and you may be able to sort something out with them.

Direct debits

If you know your account will have enough money in it to cover bills you could set up direct debits to pay them all which takes all the hassle of having to remember to pay each month. You often get discounts for doing this too, however do read your bills when they come through for overcharging or in case they suddenly start rocketing. If you live in a shared house don't be the one person who takes on the responsibility of paying all the bills this way as you'll be the one left out of pocket waiting for everyone else to cough up their share.

Old tenants' debts

If you have trouble connecting the phone etc due to large debts left by previous tenants, you need to tell the phone company that you are a new tenant who is not responsible for the previous tenants' debt. You may need to get your landlord or letting agency to back you up on this. It's a pain, but you will be able to sort it out eventually.

And the rest

You may also be expected to pay a share of the television licence, cable or satellite TV connection, internet connection deals, and rental of items such as washing machines. And don't forget to budget for mobile phone bills if you own one.

Updated: 01/06/2009