The UK’s financial services regulator has told banks and other lenders they ought to give their customers a break from repayments if they need one as the coronavirus crisis unfolds.
A temporary payment freeze on personal loans and credit cards for up to three months is among the measures outlined by the Financial Conduct Authority (FCA), with lenders given until Monday April 6th to respond those proposals.
Expectations are that the rules giving borrowers affected by coronavirus more breathing space will be officially introduced from April 9th.
In addition to the freeze on loan and credit card payments, the FCA has said it wants to see banks giving their customers access to £500 worth of interest-free overdraft facilities for up to three months.
Borrowers are being encouraged to keep up their repayments on loans and credit cards if they can make them but there is clearly an expectation that a very large number of people across the UK will be struggling to pay their bills in the coming weeks and months.
The instruction from the FCA to banks and lenders is to ensure that consumers are not penalised for suffering financially due to coronavirus and that no one should see their credit ratings damaged because they’ve taken advantage of opportunities to temporarily freeze their repayments.
“Coronavirus has caused an unprecedented financial shock with far-reaching consequences for consumers in every corner of the UK,” said the FCA’s interim chief executive Christopher Woolard.
“If confirmed, this package of measures we are proposing today will help provide affected consumers with the temporary financial support they need to help them weather the storm during this challenging time,” he added.
In Scotland, SMPs recently supported emergency coronavirus legislation that incorporated rules designed to grant people who are struggling to pay their debts the right to apply for six months of ‘breathing space’ during which they can seek advice on viable debt solutions.
If you live in Scotland and you are worried about your personal debts for any reason then Scotland Debt Solutions can help. Contact us directly to arrange a FREE and confidential consultation.
Millions of low-income households across the UK are being dragged down by debts they accumulated during the pandemic.
People with debt problems should not be afraid to confront the realities of their circumstances and tackle them head on, according to the expert money adviser Martin Lewis.
Our Scottish based team can help advise you on your debt problems.