Borrowers facing financial difficulties due to COVID-19 have one week remaining to apply for a three-month payment holiday on their mortgage, credit cards and loans.
After 31 October, banks and building societies will no longer need to offer formal payment deferrals to customers and will instead be required to give tailored support to borrowers affected by the pandemic.
Here, Which? explains how coronavirus payment holidays are coming to an end and outline why we believe that the current support measures should be extended for longer.
Seven months on, more than 4.4m payment deferrals have been granted, including 2.5m mortgage holidays, 1.1m credit card deferrals, and 793,000 personal loan deferrals.
A further 27m interest-free buffers have been applied to current account overdrafts.
The deadline to apply for a payment holiday is Saturday 31 October.
At time of writing, 323,700 payment holidays are still in place, including 162,000 on mortgages, 97,300 on credit cards and 64,000 on personal loans.
The banking trade body UK Finance says that after next week's deadline, banks will offer ongoing tailored support for customers rather than formal payment holidays.
It says further measures for affected mortgage customers may include extending their mortgage terms, switching temporarily to an interest-only mortgage or deferring interest payments.
On credit card and loans, it says lenders could offer reduced payments for a further period if the customer believes their circumstances will improve. Those facing longer-lasting hardship could be offered a long-term repayment plan or have their credit refinanced at an affordable rate.
If you're concerned about your finances, you have until 31 October to apply for a three-month payment holiday, which you can do by contacting your lender.
Some lenders will need to be contacted by phone, but most major banks and building societies offer online forms or allow you to apply through your internet banking account.
While it can take a long time to get through to banks at the minute, it's worth speaking to your lender rather than using a form if you're interested in hearing about alternatives to payment holidays that might be more suitable for your circumstances.
If you do go down the payment holiday route, once you've set up the deferral you won't need to make a payment for three months.
Interest will continue to accrue, however, so it will take you longer and cost you more to settle the debt. This means that if you can afford to make your monthly repayments it's best to do so, rather than applying for a payment holiday.
Once your payment holiday ends, you'll need to start making your monthly repayments again.
Any extra interest accrued will have been added to your balance, so you might see an increase in your credit card's minimum payment.
If you took a mortgage payment holiday, your lender should contact you to discuss options, which might be to extend the total mortgage term or increase your monthly payments.
Payment holidays taken out before the deadline won't show up on your credit report, but additional help you receive after this date may be marked on your file. This will be visible to other lenders and could potentially affect your ability to get credit in the future.
If you're worried about being unable to resume payments, you should contact your lender to discuss your options.
The FCA says that 31% of people have seen a decrease in income since the COVID-19 outbreak, and Which? believes the current measures should be extended to provide extra support to those facing financial hardship when the comes to an end.
GarethShaw, head of money at Which?, says: 'While the FCA's actions will help some who will struggle financially when support measures such as the furlough scheme come to an end, it doesn't go far enough to protect those most in need, particularly as swathes of the country face further restrictions and uncertainty.
'The regulator has wound down vital protections such as payment deferrals too soon and banks could now be overwhelmed by a huge number of customers that will be applying for urgent financial assistance in the next few months.
'The FCA must reconsider its decision to remove protections across all financial products. It should also reverse its plans to resume normal credit reporting, as it's not fair to penalise customers who fall into financial difficulty because of circumstances out of their control.