LONDON (Reuters) – Britain’s financial watchdog said on Monday it would extend payment holidays on credit cards, auto finance, personal loans and pledged property before tighter coronavirus restrictions come into effect this week.
The Financial Conduct Authority (FCA) also extended the availability of deferrals for mortgage payments until January after Britain announced a month-long lockdown across England would begin on Thursday to contain a second wave of the pandemic.
Consumers who have not yet benefited from a payment deferral under guidelines released in July can request one that lasts for up to six months, the FCA said in a statement.
Borrowers who have already had a deferral could apply for a second, the FCA said.
“Borrowers should only resort to this support if they need it,” the statement added.
For high-cost, short-term credits such as payday loans, consumers could request a one-month deferral of payment if they haven’t already had one, the FCA said.
“We will be working with commercial organizations and lenders on how to implement these proposals as quickly as possible, and will make another announcement shortly,” FCA said.
The new lockdown coincides with the traditional start of the Christmas shopping season, a period of more intensive credit card use and a critical time for retailers looking to stay in the dark for the year.
The FCA said it is also proposing that mortgage borrowers who have not yet requested repayment leave can apply for one for a total term of up to six months.
Those who had already obtained an initial three-month deferral under guidelines that expired last month, or who have started repaying an initial deferral, can now request another three-month payment holiday, the FCA said.
Mortgage borrowers would have until Jan. 31, 2021 to request a postponement, and no one will repossess their home without their agreement before that date, the watchdog suggested.
The proposals were submitted for public consultation until Thursday before the publication of the final guidelines.
“Lenders will provide information after today’s announcement on how to apply for this support,” said Eric Leenders, managing director of personal finance at UK Finance, a banking industry body.
Reporting by Huw Jones; Editing by Rachel Armstrong and Edmund Blair