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As required by the Financial Conduct Authority (FCA), all Covid-19 related payment deferrals came to an end on 31 July. However, other forms of help are still available.
The closure of payment deferrals follows 16 months of unique support the finance industry provided to customers in the face of extraordinary circumstances. As the pandemic took hold in March 2020, the industry responded very quickly to provide relief to customers whose finances were suddenly and unexpectedly put under significant pressure. Payment deferrals across mortgages and consumer credit provided vital support to those facing reduced income and job uncertainty as lockdowns and health risks persisted. Working closely with the FCA, the industry took swift action to provide the necessary regulatory flexibility so that lenders could respond to the urgent needs of their customers.
16 months on, we can take a look at the support that has been delivered to date. In total, lenders provided almost three million payment deferrals for mortgages and some 2.2 million payment deferrals for personal loans and credit cards. In addition, 27 million customers benefited from an interest-free overdraft of up to £500.
A significant number of customers who benefited from this relief have been able to return to making their payments as the picture surrounding their employment and income becomes clearer. Mortgage payment deferrals helped customers to remain out of arrears throughout the course of the pandemic and eased the pressure on those already in early arrears. Meanwhile, it is important to remember that housing possession cases remain low as lenders continue to support people to stay in their homes.
However, we recognise that not all customers are recovering from the pandemic at the same pace. As such, the industry will continue to provide support that is tailored to customers? specific needs. For those struggling to make a payment on their mortgage, credit card or personal loan, we urge them to get in touch with their lenders as soon as possible; ideally before they start to miss payments. In some cases, particularly where they have a number of debts relating to both credit agreements and household bills, lenders may suggest that the customer speaks to a provider of free debt advice, who can assess their position holistically and represent them in conversations with multiple providers.
Tailored support will be based on an assessment of the customer's ability to pay and will comprise one or more options. These may include short-term or longer-term payment plans or a change to the product terms, all of which lenders will explain to the customer. It is always in the customer's best interests to make some payment where they can. We recommend customers also visit the MoneyHelper website to check their eligibility for additional government support.
As we reach the important 31 July milestone and look back at the last 16 months, the industry has worked extremely hard to support customers but recognises that this is not the end of the road for some. We want to reassure those in financial difficulty that tailored support is readily available across mortgages, credit cards and personal loans. We continue to encourage customers to take the first step by contacting their lenders.
Eric Leenders, Managing Director, Personal Finance, UK Finance