According to the Financial Conduct Authority, households can apply for additional loan, credit card, and mortgage assistance after their next month’s payment vacation ends.
It is said that those struggling to keep up with payments can seek additional help as large parts of the UK are being forced into second locks.
The FCA’s payment holidays for mortgages, loans and more will expire on October 31st.
Whenever possible, households should resume payments to avoid interest build-up.
However, those who are still unemployed or on vacation can apply for additional financial support.
Numbers show that more than 12 million people in the UK had poor financial resilience at the height of the pandemic – meaning they struggled with bill payments.
Assistance will be available for those who have already taken advantage of a payment vacation and for those in need of new assistance, the FCA said.
According to new plans, companies need to discuss support measures with customers to avoid payment defaults.
This may include suspending, reducing, waiving or canceling interest or fees, suspending or reducing payments, or setting up a repayment schedule for the customer.
New measures include those who are struggling to repay their overdrafts.
Companies must also treat customers fairly. For example, a bank cannot take back a person’s home if they are threatened with homelessness.
Those who have previously had payment leave must also be offered a repayment plan.
The FCA said companies need to be transparent about additional changes they might see as a result of the assistance, including whether their loan records are affected.
Sheldon Mills, Director of Strategy at FCA, said: “We want to remind consumers, especially those new to financial difficulties, that lenders can help.
“You have options that reflect the uncertainties and challenges many customers will face in the months ahead. It is also important that households in serious financial difficulty seek debt advice to assist them. ”
However, Gareth Shaw, at Which ?, has called for an urgent extension of the government’s current payment vacation amid rising unemployment.
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It is because Manchester is introducing new Tier 3 restrictions today that will force hundreds of businesses to close.
“While the FCA’s actions will help some who will struggle financially when support measures like vacation come to an end, it does not go far enough to protect those most in need, especially as parts of the country face further restrictions and uncertainties.
“The regulator lifted key safeguards such as payment deferrals too soon, and banks may now be overwhelmed by a large number of customers who will be urgently seeking financial assistance over the next few months.
“The FCA needs to reconsider its decision to remove protections from all financial products. She should also reverse her plans to resume normal credit reporting as it is not fair to punish customers who get into financial trouble due to circumstances beyond her control.
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