There are several steps you can take to help balance your budget. Think about whether there are any ways that you can increase your income.

Are you entitled to additional tax allowances?
Most people over 65 are entitled to higher tax allowances. See our leaflet Check Your Tax (PDF) for more information and to ensure that you are not paying too much tax.

Are you entitled to any welfare benefits?
If your weekly income is low, you may be able to claim Pension Credit to top it up. You may be able to get help with your council tax, through Council Tax Benefit, and your rent through Housing Benefit. You could be entitled to Attendance Allowance or Disability Living Allowance if you need help with your personal care, or Carer's Allowance if you are a carer. Our free advice leaflets Can You Claim It? (PDF) and Claiming Disability Benefits (PDF) will help you to work out what benefits you are entitled to. You can also receive advice on benefits by phoning our advice line SeniorLine.

Check the amount non-dependants pay for their keep
If you have non-dependant adults living with you, for example grown-up children, it is easy to forget the extra expenses they create - increased heating, food, laundry and cleaning costs. Having a non-dependant living with you can also reduce your entitlement to some benefits. Make sure that the amount they give you covers all these extra expenses. It might help to show them your household expenses List 2 so that they can see why their contribution is important.

Avoiding big bills
The aim with all your spending should be to spread bill payments over the year so that your outgoings match your income in amount and frequency. You can avoid large bills, which will place a strain on your personal budget, by using some of the following methods.

Budget schemes
Many organisations offer the choice of paying bills by a regular budget scheme; you can often pay your TV licence, council tax, gas, electricity, water and telephone bills in this way. Using this facility does not usually involve any extra expense and spreads the cost of large bills over the year. Details of these schemes are available from the various organisations concerned.

Bank accounts for day-to day need
If you do not already have a bank account, think about opening one.

• Using a bank account to handle your bills is safer than paying by cash or savings stamps.
• It can be cheaper as many organisations prefer you to pay bills by direct debit and some will give you discounts if you pay in this way.
• State Retirement Pension and other benefits are now usually paid direct into a bank or Post Office account.
• Many banks offer telephone banking which is particularly useful if you are housebound.
• You can operate some accounts by post or through the internet.
• Having a bank account can also help you to budget by providing you with regular statements of your income and spending.

Most people are used to having a deposit account with a bank, building society or the Post Office. But you can now open accounts with supermarkets, major retailers, insurance companies and credit unions. It is worth investigating the different types of accounts on offer. Here are just a few of the more common accounts to consider:

• basic bank accounts
• instant access (or 7 day) savings accounts
• interest bearing current account
• National Savings Easy Access Savings Account at the Post Office
• high interest cheque account with a bank, building society or finance company
• internet current account

Basic bank accounts are better if you need a simple account or want to reduce the risk of going overdrawn by mistake. Current accounts offer chequebooks or allow you to take an overdraft. Most high street banks do not charge you for using an account but check this with them before opening one. The Financial Services Authority produces a useful leaflet 'No bank account? Why it could pay you to have one' (see Still not enough money? for their details). Shop around for the best interest rate, and make sure you read the small print on high interest cheque accounts, as monthly charges can be higher than the interest paid out.

Keep a 'rainy day' account:
If you want to save regularly for Christmas, holidays or unexpectedly large bills, look at a high interest account with a bank or building society or a National Savings Investments Account like those listed above. But remember that these accounts have notice periods for withdrawals. If you have a computer, an Internet current account will pay some of the highest rates. If you are a non-taxpayer, get form R85 from the bank or building society you save with. Fill it in and you will avoid paying tax on any interest you earn on your savings.

Even when you have opened an account, compare interest rates with other accounts and other building societies and banks from time to time; you may find a better deal.

Savings stamps and payment cards
You can get savings stamps to pay bills, your TV licence and vehicle licence (road tax) from the Post Office. They are useful because you can buy them for small amounts each week. However, you do not receive any interest on the money that you have paid and if they are lost or stolen you will still have to find the money for the bill. Many fuel and telephone companies have stopped using savings stamps and now run payment card schemes to allow customers to pay small amounts each week. Contact your telephone company and gas and electricity suppliers for details of the payment card schemes they offer.

Regularly check the condition of household items
See the section above on replacing old and worn household items before an emergency strikes.

Insulate your home
Fuel costs are often a worry, but insulating your home can help to reduce bills. People aged 60 or over may be eligible for a government grant to insulate and draughtproof their property, or in some cases to install central heating. The rules vary for each of the four nations. For further information telephone:

• England - Tel: 0800 316 6011
• Scotland - Tel: 0800 072 0150
• Wales - Tel: 0800 316 2815
• Northern Ireland - Tel: 0800 181 667

Our free advice leaflet Keep out the cold (PDF) gives further advice on saving energy.

For advice and information on benefits and housing grants call SeniorLine.

Credit unions
Credit unions provide a way of getting credit at low cost. They are financial co-operatives run by groups of people with something in common. Members may live in the same area or be members of an organisation, such as a church or a club. Members of the credit union save together. The money they save is then available to give out as loans. In this way members help each other.

There are more credit unions in some areas than others. They are regulated by the Financial Services Authority or in Northern Ireland by the Registry of Credit Unions and Industrial and Provident Societies. You should contact these regulators if you want to find out if there is a credit union in your area, or are interested in setting one up. Their addresses are in Useful contacts.

Equity release schemes
Equity release schemes allow older homeowners to convert some of the value of their homes into a cash sum, or into regular monthly income. There are many things to consider with schemes like this and it is important to think about whether this is really your best option. It is vital to get professional financial advice and check any agreement with a solicitor before signing it.