On 1 July the Financial Conduct Authority (FCA) updated its guidance to enable lenders to provide further relief for customers whose finances are temporarily affected by Covid-19. These measures extend the time periods and enable customers who have not yet taken out payment deferrals on credit cards and loans or applied for interest-free buffers on overdrafts up to £500 to do so up until 31 October 2020. The measures also allow those who currently receive such support to apply to extend this for a further period of three months.   

As of 9 July 2020 UK Finance members have provided 1,018,246 credit card and 707,421 personal loan payment deferrals and have made available over 27 million interest free overdraft buffers on the first £500 of borrowing, providing significant support to help customers get through these difficult times. This support will continue to provide a helpful bridge for customers? finances as the UK starts to return to more normal working patterns. However, as the FCA also makes clear, it is important that customers think carefully before making use of payment deferrals and only do so if they need immediate assistance, as this will help to keep down the overall cost of borrowing.  

We have updated our Frequently Asked Questions relating to credit card and personal loan payment deferrals and interest-free buffers on overdrafts. We hope these will help customers decide whether or not these options are right for them. We would encourage those who want to find out more about the help available, or who want to apply for temporary relief, to check  their provider's website in the first instance. Where customers are already in receipt of credit card or personal loan payment deferrals, their lender will be in contact with them before the deferral ends to see if their circumstances have changed, or whether further support is required. Similarly, lenders will also be supporting eligible customers who require a further extension to their interest-free buffers; customers are advised to check firms? websites for further information on how to apply.  

We would encourage customers to engage with their lender to ensure the right solutions are provided as lenders have a number of options available to help those experiencing financial uncertainty. Payment deferrals are not the only solution and may not always be the right solution.

Lenders will have further information available about how they will apply these measures on their own websites and we would encourage customers to read this carefully.