The Financial Conduct Authority (FCA) has announced that it will extend payment holidays on credit cards, personal loans, pawnbroking and motor finance to support borrowers affected by the COVID-19 pandemic.
Consumer credit customers who have not yet had a payment deferral under the FCA’s July guidance may request one that will last for up to six months, the UK regulator said in its release. At the same time, borrowers who have already had one deferral will be allowed to apply for a second.
“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, adding that lenders would soon provide further information on what this will mean, and that consumer credit customers should not contact their lenders yet.
Mortgage payment holidays, which had been slated to end in the UK on 31 October, will also be extended under much the same conditions. Borrowers who have not yet had a payment deferral will be allowed to request one that will last for up to six months. Borrowers who already have a deferral can extend it to a maximum of six months.
The FCA warned: “It may also be in the interests of mortgage borrowers who expect to have long-term financial difficulties to agree other forms of tailored support with their lender.”
The regulator’s new guidance comes ahead of an England-wide lockdown that will come into effect on Thursday and last for a month, ending on 2 December, in an effort to curtail the second wave of COVID-19 infections. Non-essential retailers and hospitality services will be closed, and travel will be subjected to further restrictions.
However, educational facilities such as schools and colleges will be kept open.
“We’re not going back to the full-scale lockdown of March and April. The measures that I’ve outlined are far less primitive and less restrictive,” said prime minister Boris Johnson on Saturday. “Though, I’m afraid, from Thursday, the basic message is the same: Stay at home, protect the NHS, and save lives.”