The UK’s financial watchdog has extended emergency measures to allow consumers struggling financially due to the coronavirus outbreak to freeze loan and credit card payments until 31 October.
The measures, which were announced by the Financial Conduct Authority in April for an initial period of three months, also includes overdrafts, store cards and catalogue credit.
Customers who have yet to request a payment freeze, or an arranged interest-free overdraft up to £500, can apply for one until 31 October.
For consumers who have already taken one and are still experiencing temporary payment difficulties due to the health emergency, the FCA said firms must continue to offer support including further payment deferral, or reducing payment amounts to a manageable level, for a further three months.
“We have been working closely with other authorities, lenders and debt charities to support consumers in the current emergency,” said Christopher Woolard, interim chief executive at the FCA. “The proposals we’ve announced today would provide an expected minimum level of financial support for consumers who remain in, or enter, temporary financial difficulty due to coronavirus.”
At the end of a first payment freeze, firms are expected to contact customers to see if they an afford to resume payments, and if so how they can repay missed payments.
“Where consumers can afford to make payments, it is in their best long-term interest to do so, but for those who need help, it will be there,” said Woolard.
Customers who have already arranged an interest free overdraft and are still struggling can request another one of up to £500. They will also be able to request a reduced interest rate on any additional borrowing in excess of £500.