The UK’s financial watchdog said on Monday it would extend payment holidays on credit cards, car finance, personal loans and pawned goods before tougher coronavirus restrictions come into effect this week.
There will be a one-month lockdown across England, which will start on Thursday to contain a second wave of the pandemic.
Consumers who have not yet had a payment deferral under guidance issued in July can request one that lasts for up to six months, the Financial Conduct Authority said in a statement.
Borrowers who have already had one deferral would be able to apply for a second deferral, the FCA said.
“Borrowers should only take up this support if they need it,” the FCA said in a statement.
For high-cost, short-term credit like payday loans, consumers could apply for a payment deferral of one month if they have not already had one, the FCA said.
“We will work with trade bodies and lenders on how to implement these proposals as quickly as possible, and will make another announcement shortly,” the FCA said.
Shopping
The new lockdown coincides with the traditional start of the Christmas shopping season, a time of heavier use of credit cards and a critical period for retailers seeking to stay in the black for the year.
The FCA said on Saturday it would propose further relief for up to six months to help mortgage borrowers and would make a statement on Monday.
“Lenders will provide information after today’s announcement on how to apply for this support,” said Eric Leenders, managing director of personal finance at UK Finance, a banking industry body.
Money Advice Trust, a charity that helps people deal with debt, said extending the availability of payment deferrals on mortgages and consumer credit was sensible, but similar steps were also needed to help the self-employed and renters. – Reuters
