Credit card and loan customers benefit from extended payment holidays of up to six months


Financial Conduct Authority updates guidelines to help consumers whose finances have been affected by coronavirus, such as those with credit cards and personal loans

Payment holidays are designed to help those struggling with their debt (stock photo)

Additional support for borrowers whose finances have been affected by the coronavirus, such as those with credit cards and personal loans, has been confirmed by the city regulator.

The Financial Conduct Authority is updating its guidelines for businesses, which also cover store cards, catalog credit, lease purchase, buy now, pay later, pawnshop, auto financing and payday loans.

Consumers struggling with the cost of their overdrafts due to the coronavirus can request assistance that reflects their individual circumstances, as outlined in the FCA’s personalized assistance guidelines, released in September. This could include reducing or waiving interest.

The new guidelines will take effect on November 25, but the FCA is encouraging companies that are able to start providing enhanced support sooner to do so.

The new guidelines will take effect on November 25 (stock photo)


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Consumers will have until March 31, 2021 to request a first or another payment holiday.

After this date, they will be able to extend the existing deferrals until July 31, 2021, provided that these extensions cover consecutive payments, and subject to a maximum of six months of authorized deferrals.

Under the new management:

  • Borrowers who have not yet had a payment deferral will be able to request payment deferrals of up to six months in total.
  • Those who currently have a payment holiday will be able to request a further postponement, provided that the total duration does not exceed six months.
  • Those who have already had a payment deferral of less than six months will also be able to request another payment deferral, provided that the deferrals do not exceed six months in total.
  • Consumers of high-cost short-term credit, such as those with payday loans, will be entitled to a one-month deferral of payment.

The FCA said some companies may decide that a deferral of payment is not in a customer’s best interest. In such cases, the company should instead provide tailor-made assistance tailored to the client’s situation, he said.

FCA said some companies might decide that a deferral of payment is not in a customer’s best interest


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People who have already had six months of payment deferral but who are still in difficulty should benefit from support adapted to their needs.

Sheldon Mills, Acting Executive Director of Strategy and Competition at FCA, said: “It is in the consumer’s best interest to only take a payment deferral when absolutely necessary. Those who are able to continue paying should do so.

“However, for those who continue to face payment difficulties due to the coronavirus, these measures will ensure that they will continue to be able to access the support they so badly need during this crisis.

“We also wish to emphasize that tailor-made support will always be offered and remains the most appropriate option for many borrowers.”

A deferral of payment under the new, finalized guidelines would not be flagged as missed payments on a consumer’s credit report. This does not mean that consumers’ ability to access credit will not be affected, as lenders may take a range of information into account when making lending decisions.

But tailored assistance can be flagged in a consumer’s credit report, and lenders should let consumers know when it does. This would include any other deferral of payment offered.

The FCA said it would continue to keep the support available to consumers under review.

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