Homeowners will be able to apply for a mortgage payment holiday for up to six months if they are facing financial difficulty as a result of coronavirus, following the announcement of a new national lockdown.
Financial assistance schemes designed to help borrowers during the pandemic, allowing them to take debt repayment holidays without it affecting their credit files, were due to expire on 31 October.Millions of people have received financial help with their mortgages, as well as other forms of credit
However, following the prime minister's announcement of a new national lockdown on 5 November, HM Treasury has confirmed that anyone needing to take a payment holiday on their mortgage, who hasn't already taken one, will be able to do so for up to six months. These payment holidays will have no impact on your credit history.
The ability to take payment holidays has been offered on credit cards, store cards, catalogue credit, personal loans, overdrafts, motor finance, buy-now-pay-later (BNPL), rent-to-own (RTO), pawnbroking and high-cost short-term credit products. This expired on 31 October, although the Financial Conduct Authority is considering extending the financial assistance schemes to these forms of credit.
Click on the links below to find out which measures have been put in place to aid your finances during the coronavirus crisis.
The FCA has outlined a range of measures which it expects to see from financial firms when the official coronavirus guidance ends on 31 October.
These expectations include:
The FCA also wants overdraft customers who received financial help to be contacted to see if this help is still needed. If they do (or a newly affected customer gets in touch), firms should offer tailored support such as waiving or reducing interest, agreeing on a plan of staged reductions in their overdraft limit or supporting customers to reduce their usage by transferring the debt. It will monitor firms to ensure customers are being treated fairly.
Crucially, any customers who require financial assistance after the guidance ends in October will see the help recorded on their credit file in accordance with the normal reporting process. The FCA says firms must make the implications of this clear to customers when they offer the support.
This guidance came into force today (2 October).
On 2 April, the FCA proposed a range of temporary measures to offer support to people struggling with their finances due to the coronavirus pandemic, which came into force on 9 April. The measures included:
On 1 July, the FCA confirmed how it wants the support to continue. From 3 July, credit firms must set out the following options to their customers experiencing financial difficulty due to COVID-19:
The FCA also confirmed that it will not extend the requirement for firms to make sure that overdraft customers were no worse off on price compared to prices they were charged before recent overdraft changes came into force. In April, the FCA had asked firms to temporarily reduce overdraft charges to reflect this requirement.
Instead, firms are now free to set their own interest rates on overdrafts, but customers with financial difficulties should be able to request support on additional borrowing in excess of £500.
What's more, any firms that do choose to increase overdraft charges should give overdraft customers an opportunity to seek extra support before the changes come into force.
On 24 April, the FCA confirmed further measures for motor finance and high-cost credit customers.
It states that car finance firms should provide a three-month payment freeze for those who are having temporary difficulties meeting finance or leasing payments on a vehicle and has said firms should not make 'unfair' changes to customer contracts.
Payday loan firms are being instructed to offer a one-month interest-free payment freeze to those who have been financially impacted by the coronavirus outbreak, along with three-month payment freezes for those signed up to pawnbroking, rent to own (RTO) and buy now, pay later (BNPL) agreements.
On 15 July, the FCA confirmed how it wants the support to continue. From 17 July, credit firms must set out the following options to their customers experiencing financial difficulty due to COVID-19:
According to the latest data from UK Finance released on 17 July, 707,000 payment deferrals on personal loans have been granted over the past three months.
We've set out the policy of each lender in the table below.
|Lender||Coronavirus repayment relief policy||How to apply|
|Barclays||Individual customers can apply for a three-month loan payment holiday. Business customers can get 12-month repayment holidays on loans of more than £25,000.||- those who were already in financial difficulty before the coronavirus crisis will need to call 0800 716598.|
|First Direct||You can apply for a three-month loan payment deferment - even if you've already missed a loan payment. You're not able to top up existing loans, and any other extra credit must be applied for in the usual way and is subject to the usual credit checks.||Fill out the and email it to . First Direct will get in touch to let you know whether the application is successful.|
|HSBC||Three-month loan deferments can be applied for until 20 June 2020. This will usually apply to your next three loan payments, but if a payment is due shortly it may have to wait until the following month.||. . .|
|Lloyds Banking Group (including Bank of Scotland, Halifax and Lloyds Bank)||No fees for missed payments on loans, plus payment holidays and additional support where customers need it.||. .|
|Metro Bank||Can offer payment holidays, but this is decided on a case-by-case basis.||Call 0345 080 8500 to discuss your options.|
|Monzo||Has specialist teams in place to monitor the situation and support people in financial difficulty. Is encouraging customers to get in touch if they are worried about loan repayments. Unable to offer emergency loans.||Use the in-app live chat service.|
|Royal Bank of Scotland (including NatWest and Ulster Bank)||Borrowers can apply to defer loan payments for up to three months.||Request payment deferrals through the mobile app - after logging in, select Help at the bottom of the screen, followed by Message us. Quote coronavirus loansin your message.|
Some will also offer refunds on any fees charged for withdrawing cash on a credit card.
UK Finance data from 17 July 2020 revealed that lenders have already provided 1.05 million credit card payment deferrals over the past three months.
The table below sets out what lenders have announced and told us.
|Lender||Coronavirus repayment relief policy||How to apply|
|Barclays||Three-month payment holidays are available for those who haven't missed any Barclaycard payments between September 2019 and February 2020 (missed payments in March and April are being overlooked). Late payment charges and cash advance fees will be waived for 90 days from 19 March.||. If your application is accepted, Barclaycard will let you know, and it'll show as a message in your next statement.|
|First Direct||You can request a three-month credit card payment holidays until 20 June 2020. From 8 April to 8 July, no late payment fees will be charged for any late credit card payments; this will be applied automatically.||Fill out the to request a payment holiday, and First Direct will contact you by email or letter to let you know if you're successful.|
|HSBC||Three-month payment holidays are available for credit card customers with short-term financial difficulties. Requests will be accepted until 20 June 2020. No late payment fees will be charged on credit card repayments between 8 April to 8 July 2020; this is applied automatically.||for a payment holiday, and wait to hear whether your application has been successful - the decision will either be sent by post or email.|
|Lloyds Banking Group (including Bank of Scotland, Halifax and Lloyds Bank)||Three-month repayment holidays can be applied for online; there are no fees for missed credit card payments, and promotional interest rates won't be removed in the short term.||. Apply online for Halifax. .|
|Metro Bank||Will consider waiving credit card fees, increasing credit limits, offering payment holidays and moving credit card debt to a personal loan with a lower interest rate - all decided on a case-by-case basis.||Call 0345 080 8500 to discuss your options.|
|Nationwide||Increased credit card limits and removal of interest charges for members in financial difficulty. Offering a three-month payment holiday reducing monthly payments to £1. Must be up to date with payments.||.|
|Royal Bank of Scotland (including NatWest and Ulster Bank)||Offering three-month payment holidays from 9 April. Refunds offered on credit card cash advance fees. Affected customers can apply for a temporary . No late payment fees for credit card payments will apply between 1 April and 30 June 2020.||Currently no specific info about applying for credit card payment holidays.|
The FCA says credit card firms should provide 'strong support' by offering 'greater flexibility to customers in persistent credit card debt'.
Currently, lenders need to contact customers who have been in persistent debt for 36 months to offer them options to repay their borrowing more quickly. If they don't respond within a set timeframe, firms must suspend their credit card.
These rules will now be relaxed, with the FCA set to contact lenders to advise them to give customers more time.
In the table below, we set out how banks are changing their overdraft policies to help customers.
UK Finance figures released on 17 July reveal that over the past three months more than 27million customer accounts have been offered three months of interest-free borrowing on the first £500 of their arranged overdrafts.
|Lender||Overdraft changes||What else the bank told us|
|Al Rayan Bank||n/a||It will work with customers on an individual basis to assess what help is available and help them manage their finances.|
|Barclays||Overdraft interest will automatically be waived from 27 March to 30 April. Offering a fee-free buffer of £750 on all pre-arranged overdrafts, along with a temporary interest rate of 19.51% EAR. This will be automatically applied for both new and existing customers. If you were overdrawn before 22 March 2020, you'll still have to pay a daily fee.||Current overdraft limits won't change; any extensions to overdraft limits should be applied for in the usual way.|
|First Direct||Due to increase the overdraft fee-free buffer to £500 in the next few days, but further information is not yet available.||Suspended sales of new current accounts.|
|HSBC||From 26 March, interest-free overdraft buffer increased from £25 to £300 for HSBC Bank Account and HSBC Advance Accounts for three months. This was allocated automatically. From 9 April 2020, for three months, it's extending this support by temporarily not charging interest on the first £500 of overdraft borrowing. Additionally, for these customers, it's temporarily charging 19.9% EAR (variable) for any arranged overdraft balances above £500.||If you would like to add an overdraft or increase your existing limit, you can log on to online banking and.|
|Lloyds Banking Group (including Bank of Scotland, Halifax and Lloyds Bank)||Interest-free overdraft buffer of £500 from 9 April to 9 July 2020; anyone with arranged overdrafts of less than £500 will have their whole overdraft interest-free. You can also apply for an increased overdraft limit through your online banking app.||Increased deposit limits of up to £500 in online banking (including up to £500 using cheque scanning) to help people who can't access branches. There is also a new dedicated phone line for customers who are aged 70 or over, have been identified as vulnerable or may need extra support, as in the case of NHS workers.|
|Metro Bank||Waiving overdraft interest from 1 March until 30 June for personal customers.||Also allowing ATM withdrawals of up to £300 a day, and temporarily waiving the requirement to give 24 hours' notice for cash withdrawals of more than £1,000 - there is now a £5,000 daily limit.|
|Monzo||Use the in-app live chat if you're worried about overdraft repayments. Unable to offer emergency overdrafts.||Has specialist teams in place to monitor the situation and support people in financial difficulty.|
On 17 March, the government announced that homeowners who are up to date with their payments can apply for a three-month payment holiday from their mortgage. A day later, this policy was extended to .
On 2 June, the FCA confirmed mortgage holidays will be available to the end of October. This means those who haven't already applied for a mortgage holiday now have until 31 October to do so, and those who already have a three-month mortgage holiday can have it extended for a further three months if required.
Following the announcement of a new national lockdown, people who face financial difficulty will be able to apply for a mortgage payment holiday for up to six months, if they haven't already had one. Those that have already started a mortgage payment holiday will be able to top up to six months without this being recorded on their credit file.
However, the Financial Conduct Authority has stated that homeowners who have already benefitted from a six-month payment deferral should speak to their lender to agree tailored support - suggesting that they will not be able to take further payment holidays without an impact on their credit history. Instead, banks will offer a range of short and long-term help, offered on a case-by-case basis.
Borrowers can apply for the holiday by contacting their lender and self-certifying that their income will be directly or indirectly affected by the coronavirus pandemic.
Under the temporary measures, the FCA told lenders to ensure that no one's credit reports and scores were impacted as a result of getting payment help. This will change after 31 October.
The UK's three main Credit Reference Agencies (CRAs) have pledged to protect credit scores during the coronavirus pandemic.
Experian, Equifax and TransUnion have agreed to an 'emergency payment freeze', with new guidance which ensures an individual's credit score is not affected over the duration of the agreed payment holiday.
This will freeze anyone's credit score whenever someone agrees to a temporary payment arrangement with a lender or credit provider.
The emergency payment freeze can apply to mortgages, loans, credit and store cards, plus catalogue credit, and will cover a payment holiday as well as reduced payments or increased credit limits.
However, you must not simply cancel your direct debits or fail to pay your bill - there must have been an agreement with your lender.
Taking it upon yourself to stop paying something such as your mortgage or credit card bill will mean a missed payment default is recorded on your credit report, which will harm your credit score.
The guidance above applies to customers until 31 October, after which point anyone still receiving financial help from a provider - or anyone who seeks help for the first time - as a result of the coronavirus pandemic, will have that aid reported on their credit report.
The FCA says this reporting will help providers gain an insight into customers' circumstances and reduce the risk of unaffordable lending.
Lenders should make the credit report implications clear to customers when they set out options for financial help.
This guidance will be kept under review and may be changed if circumstances change significantly.
The government has brought forward emergency legislation to protect tenants from eviction.
The reforms mean that from 26 March until at least 30 September, landlords must provide three months' notice in advance of starting proceedings to evict private or social tenants.
The courts have also taken measures to suspend all proceedings for, and enforcement of, possession orders for a period of 90 days from 26 March.
In another measure to help those who need to access their savings during the coronavirus crisis, the Treasury announced on 1 May 2020 that it would be reducing the withdrawal penalty to 20%, down from 25%.
This measure will be in place between 6 March 2020 to 5 April 2021.
Lifetime Isa savers are charged this amount on any withdrawals that aren't for the purpose of buying their first home or in retirement before they reach the age of 60.
So, if you take £1,000 out of your account while the penalty is reduced, you'll lose £200 to HMRC. Before this measure, you would have lost £250.
The withdrawal penalty exists to recoup the government's 25% bonus paid on the money savers deposit. However, in practice, being charged 25% on your withdrawal not only meant you had to repay the government bonus, but you also lost 6.25% of your own cash.
Here is a full list of the banks we've heard from so far:
|Al Rayan Bank||Will work with customers on an individual basis to assess what help is available and help them manage their finances.|
|Atom Bank||Customers with financial difficulties will be assessed on a case-by-case basis.|
|Bank of London and the Middle East||No immediate changes to policy, but customers facing financial difficulty should contact the bank for help as soon as possible.|
|Barclays||Fixed savings accounts can be closed early with no charge.|
|Cambridge Building Society||Affected customers should get in touch as soon as possible for help.|
|Darlington Building Society||Affected customers should get in touch as soon as possible for help.|
|First Direct||Fixed savings accounts can be closed early with no charge.|
There have been reports of some retailers refusing card payments because of fears the virus can be spread by notes and coins.
In a Which? survey of 2,003 people conducted in March 2020, 15% told us their local shop stopped accepting cash as a payment.
Early media reports suggested the World Health Organization (WHO) warned against using cash - a claim it later denied.
The Bank of England has said: 'Like any other surface that large numbers of people come into contact with, banknotes can carry bacteria or viruses.' So it's fair to say that cash is safe to use as long as you wash your hands thoroughly after touching it.
With more than 2.2 million people in the UK reliant on cash, there are fears that the coronavirus restrictions could leave them struggling to pay for the essentials.
Meanwhile, the spending limit for contactless card payments has risen from £30 to £45. From 1 April 2020, an increasing number of retailers should accept contactless payments up to the new higher limit.
The change has been brought forward as part of the industry's response to the coronavirus outbreak, to help cut queues at the checkout.
RBS and TSB will allow customers to apply to increase their maximum cash withdrawal limit at an ATM to £500.
Lloyds Banking Group is offering increased deposit limits for online banking to help people who may not be able to access branches, including up to £500 using cheque scanning.
Several banks have announced that they will be operating reduced opening hours as well as imposing social distancing measures in their branches.
Many are therefore advising that you only visit a bank branch if absolutely necessary and are encouraging people to use their online banking and app services instead.
The government has introduced a number of temporary measures to help workers who have to take time off work to self-isolate.
On Monday 9 March, the government confirmed that any claimants who can't attend their job centre appointment due to being in self-isolation should tell their work coaches and they won't be sanctioned.
However, this is at the discretion of the work coach, who must be contacted before the appointment is due.
Under normal circumstances, Universal Credit claimants would need to meet their work coach to demonstrate their claimant commitments. Failure to do so results in a '', which is when your benefits are cut.
Self-employed and gig economy workers will also be able to apply for Universal Credit or new-style employment and support allowance (ESA) to compensate for the fact that they're not entitled to statutory sick pay.
However, the Department for Work and Pensions (DWP) has confirmed that the pre-existing £16,000 savings limit will continue to apply; anyone with more than £16,000 in savings will not be eligible for Universal Credit payments.
Advances for Universal Credit are available immediately (as the benefit usually takes around five weeks to set up).
We're calling for the financial regulator to extend its help for consumers facing financial difficulties due to COVID-19 into 2021.
Our submission to the FCA recommends the following protections to prevent households facing a financial cliff edge when payment holidays, interest-free overdrafts and the furlough scheme come to an end.
Gareth Shaw, head of money at Which?, says: 'The regulator has acted quickly and effectively to help those struggling due to the pandemic, but it must be prepared to take further bold action to prevent millions of people from being hit by a perfect storm of financial pressures in the coming months.
'The huge number of payment holidays taken highlights the scale of financial difficulty people in this country are facing - a situation that is likely to become worse as support measures such as the furlough scheme come to an end.
'The regulator must treat all consumers fairly - ensuring that financial support is still provided to those who need it and also available for those who may face financial problems for the first time after 31 October.'
Experts from across Which? have been compiling the advice you need to stay safe and make sure you're not left out of pocket.
This story was published in March and has been updated since then. The last update was on 2 October with information about the FCA's confirmed plans for tailored ongoing support.