Supporting customers Covid-19
We are now months into the Covid19 pandemic and still trying to understand the impact it is having on the economy, the labour market and how we choose to live our lives.
As the economic impact takes hold, firms continue to announce major closures and job cuts. The extent of this is not yet known, but what is clear is that we will be living with this virus for many more months to come. Those that have managed through the early months may now be experiencing a change in their financial situation, especially as the end of the Government’s furlough scheme looms.
If your household income has been affected, or is likely to be in the coming weeks and months, now is the time to act. Consider how this could impact your ability to pay for living costs or make repayments. If you think you will be unable to keep up your regular commitments, please contact your lenders as soon as possible. The earlier you make contact, or seek advice, the easier it will be for those organisations to assist you.
To get in contact with a lender, their contact details will be available on the information they sent you when you took out your loan. Or check the lender’s website for any new channels they may have set up to help during this pandemic. Many lenders have new chat functions or emails to help you can tell them about any issues.
Help has always been available if you are struggling with your consumer credit repayments. This now includes the new payment deferral option. This has been created by the Financial Conduct Authority (FCA) and allows for an interest-free pause on high-cost short-term credit payments for one month. This scheme runs until 31st October 2020.
The FCA has agreed to protect the standing and credit files of those impacted by Covid19. This is only available if you get in contact with your lender.
But do talk to your lender about whether a payment deferral would be the best option for you.
There are also other long-standing forbearance tools, such as reduced payment plans or suspending payments for a time, that your lender can offer.
Where can I look for advice?
The Money and Pensions Service has a dedicated Covid19 support hub which has a wealth of information for consumers. Their advice covers all areas including redundancy, borrowing and insurance. All their advice is free, and they are also available via the telephone, if you want to chat about your situation.
If you are struggling with your finances, there are range of organisations that can help you free of charge:
The support available
- The FCA has introduced new guidance for lending firms setting out new options for lenders to take if contacted by a customer who is temporarily impacted by Covid19. This includes the option to pause payments for one month, without incurring any additional interest. Those seeking this option will have their credit rating protected. The new rules can be found here. This does require you to contact your lender in advance. Only one payment deferral is available per loan.
- Lenders regulated by the Financial Conduct Authority are always expected to offer forbearance to those individuals who find themselves in financial trouble. This will include considering the suspension of payments, reducing, waiving or cancelling any further interest or charges. Many members will also apply breathing space policies to allow individuals the time to bring forward their own suggestions, such as payment plans to fit their financial circumstances.