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UK regulator extends loan and credit card payment holidays ahead of COVID-19 lockdown

LaToya Harding
·Contributor
·2-min read
A credit card user displays her cards in Washington February 22, 2010. This logo has been updated and is no longer in use.    REUTERS/Kevin Lamarque   (UNITED STATES)
A credit card user displays her cards in Washington February 22, 2010. This logo has been updated and is no longer in use. REUTERS/Kevin Lamarque (UNITED STATES)

UK regulator Financial Conduct Authority (FCA) has announced that it will extend payment holidays on personal loans, credit cards, motor finance, and pawnbroking to further support borrowers hit by the coronavirus pandemic.

Those who have not yet had a payment deferral under its July guidance can request one that lasts for up to six months, it said in a statement.

Meanwhile, borrowers who have already had one deferral already will be able to apply for a second.

For high-cost short-term credit (such as payday loans), consumers would be able to apply for a payment deferral of one month if they haven’t already had one.

The FCA also advised that consumer credit customers continue to make repayments if they can afford to do so, adding that borrowers should only take up the support if needed.

“We will work with trade bodies and lenders on how to implement these proposals as quickly as possible, and will make another announcement shortly,” the watchdog said.

“In the meantime, consumer credit customers should not contact their lender just yet. Lenders will provide information soon on what this means for their customers and how to apply for this support if our proposals are confirmed.”

The update comes on the back of the latest government restrictions in response to rising infections across the country.

READ MORE: Coronavirus: England goes into second lockdown for one month

On Thursday England will be placed under a one-month lockdown, ending on 2 December, to curtail a second wave of COVID-19.

Under the new measures, non-essential shops and hospitality will have to close, and travel will be under new restrictions. However, schools and colleges will be allowed to stay open.

Prime minister Boris Johnson said: “Christmas is going to be different this year, perhaps very different, but it’s my sincere hope and belief that by taking tough action, we can allow families across the country to be together.

“We’re not going back to the full scale lockdown of March and April, the measures that I’ve outlined are far less primitive and less restrictive. Though, I’m afraid, from Thursday, the basic message is the same: Stay at home, protect the NHS, and save lives.”

Over the weekend, the total number of coronavirus cases in the UK since the pandemic began hit 1,000,000.

Watch: More than 1 million coronavirus cases in UK confirmed