The Financial Conduct Authority (FCA) has introduced a series of measures to help customers with loans and credit cards during the coronavirus outbreak.
The financial watchdog said the measures have been designed to give banks and lenders the flexibility to offer temporary financial relief to those facing payment difficulties during the Covid-19 pandemic
Banks and lenders are expected to offer small businesses and individuals a temporary payment freeze on loans and credit cards for up to three months for those who have been impacted by coronavirus.
RBS, HSBC, Barclays Lloyds, Santander and Nationwide have all said they will be offering payment freezes from 14th April.
From the same date, other banks and lenders offering guarantor loans, community development finance store cards, catalogue credit, logbook loans, home-collected credit and credit unions will offer payment freezes.
The FCA said those hit by the pandemic who already have an overdraft on their main current account should be allowed an overdraft of up to £500 charged at 0% interest for three months.
Lenders have been advised that they should ensure all overdraft customers are no worse off on price when compared to the prices they were charged prior to the recent overdraft pricing changes came into force.
The FCA added that customers should not have their credit history negatively affected by using any of the new measures.
Christopher Woolard, interim Chief Executive at the FCA, said: “We know many people are suffering financial pressures brought on as a result of the coronavirus pandemic. The measures we’ve announced are designed to provide people affected with short-term financial support through what could be a very difficult time. The changes will provide support for consumers with credit cards, loans and overdrafts, facing temporary financial difficulties because of the pandemic.”
“Customers should think carefully before making use of these measures and only do so if they need immediate help. Where they can still afford to make payments, they should continue to do so.”
We are here to help
At TaxAssist Accountants, our entire focus is providing accountancy services and advice to small businesses and self-employed individuals.
If you are confused about what steps to take to protect your business during the COVID-19 pandemic, we can work with you to give you a clear picture of your financial situation, including any government grants, loans or tax savings available to you.