Free vs Paid Debt Advice: How to Tell the Difference

Free debt advice and paid debt services: the basic difference

Free debt adviceFree Debt Advice in the UK: Where to Get HelpWhere to get free, confidential debt advice in the UK: the main charities and services, what they do, what to prepare and how to avoid fee-charging firms.Read more → comes from charities and some local services. StepChangeStepChange Explained: What It Does and How It WorksWhat the debt charity StepChange offers, how its free debt advice and debt management plans work, who it suits and what to expect when you contact them.Read more →, National DebtlineNational Debtline: How It Works, When to CallWhat National Debtline is, who runs it, what it can help with, how to get free advice by phone, webchat or online tools, and what to expect.Read more →, Citizens Advice and Business DebtlineBusiness Debt Help for Sole Traders and Small FirmsWhere small businesses and the self-employed can get free debt advice in the UK, and the main options, from payment plans to a company voluntary arrangement.Read more → all describe their advice as free, and the FCA states that free, impartial debt advice is available to everyone. Their job is to explain your options and help you choose, not to sell you a product.

Paid services are commercial firms. Many are authorised and regulated by the FCA, and some give good service. But they may earn fees from the solutions they arrange, such as an IVAIndividual Voluntary Arrangement (IVA)An IVA is a legally binding agreement to repay a portion of your debts over a fixed period. Understand how IVAs work, eligibility, costs and consequences.Read more → or a debt management planDebt Management Plan (DMP)A Debt Management Plan is an informal arrangement to repay unsecured debts at a monthly rate you can afford. Learn how DMPs work, who they suit and what to consider.Read more →. That does not make the advice wrong, but it means the firm has a financial interest in which solution you pick.

What the FCA says to look out for

In September 2026 the FCA published a warning about poor debt advice and listed four red flags. They are worth knowing even if you never use a paid firm.

• Pressure tactics. You are rushed into a debt solution over the phone or WhatsApp, often after repeated contact following an online enquiry or an unexpected call.
• Changing your details. You are asked or encouraged to alter your income or outgoings on forms, or you are coached on what to say.
• Fee-free options not offered. You are steered towards fee-charging solutions such as IVAs, or some debt management plans, without alternatives being explained first.
• Unclear identity. The person does not say who they work for, or their details do not match the firm's official details.

Questions to ask any firm before you agree to anything

You do not need to be an expert to protect yourself. Asking a few direct questions will tell you a lot, and a good adviser will answer them clearly.

1. Are you a charity or a commercial company, and how are you paid?
2. Will I pay anything for this advice or for the solution you are recommending, and how much in total?
3. Are there free options for my situation, such as a Debt Relief OrderDebt Relief Order (DRO)A Debt Relief Order is a formal solution for people with low income, low debt and few assets. Learn how DROs work, eligibility criteria and what happens to your debts.Read more →, a free debt management plan or Breathing Space, and why are you recommending this one instead?
4. What happens to my credit file, my home and my assets if I go ahead?
5. What happens if I miss a payment or want to leave early?
6. Can I have the recommendation in writing so I can think about it or take it to another adviser?

How to check a firm is authorised

Debt advice firms in the UK should be authorised by the FCA. The FCA says to use its Firm Checker to confirm a firm is authorised and to check that the contact details match what the firm gave you. If the phone number, email address or website does not match, treat it as a warning sign. Find the details yourself rather than using a link or number someone gave you.

The FCA has more information on unauthorised and unsuitable debt advice. If you want to avoid the question altogether, start with a free service. The MoneyHelper debt advice locator lists free options near you.

Some solutions that should cost you nothing to enter

Several routes into debt help are free by design, so you should never be asked to pay for them.

• Breathing Space gives most eligible people in England and Wales 60 days of protection from most creditor action and freezes most interest and charges. You can only get it through an authorised debt adviser, and clients cannot be charged to enter one. See Breathing Space.
• A Debt Relief Order has no fee, and you cannot apply on your own: you must go through an approved debt adviser, which is free. See Debt Relief Order.
• Free advice and budgeting help from the charities listed in our guide to free debt advice charities compared.

When paying for help can make sense

Some solutions do involve costs. An IVA, for example, is arranged by an insolvency practitioner who charges fees, and some debt management companiesDebt Management Company Fees: Free vs PaidDo debt management companies charge fees? How fee-charging firms differ from free charities, what to ask, and how to avoid paying for help you can get free.Read more → charge to manage a plan. For some people these are the right option. If you are considering one, read about IVA costs and debt management company fees, and check how to choose an IVA provider safely.

A sensible approach is to get free advice first so you understand all of your options, then compare any paid option against what you have learned. If you ever feel you were misled into a solution, see mis-sold IVAs for how to complain.

A simple rule of thumb

If a firm contacts you first, promises to write off a large part of what you owe or asks for money before it has looked at your whole situation, slow down. Genuine free services will explain your options, tell you what each would cost and leave the decision with you. You can always take time to think, ask for the details in writing and call a free service for a second opinion before you commit to anything.

If you are being pushed to decide quickly

Good advice does not come with a countdown. You can end a call, say you need time and speak to a free service before you decide. If a firm contacts you out of the blue by phone, text or WhatsApp about your debts, be cautious and find a service yourself. Our guide to free debt advice in the UK and our list of debt helplines show where to start.