Business

Britons to receive 'stop-gap' loan relief to weather pandemic

by Sinead Cruise and Huw Jones

Reuters

British consumers will get a three-month freeze on loan and credit card payments to weather the COVID-19 epidemic, under plans outlined by the country's financial regulator on Thursday.

The "stop-gap" package complements relief already announced by the government to support mortgage-holders, furloughed staff, renters and the self-employed. It includes pledges to slash to zero interest rates on arranged overdrafts up to £500, for up to three months.

The Financial Conduct Authority said it was conducting a brief public consultation until next Monday, and that the measures would be expected to come into force by April 9. It will make a further announcement about the measures next week.

"These measures would provide an expected minimum level of financial support for consumers who until now have been financially stable," said FCA interim Chief Executive Christopher Woolard.

"Where consumers can still afford to make payments, they should as normal — and this is likely to be in their best long-term interest to continue to do so."

The guidance would not prevent companies from offering more generous assistance to their customers, and some already are, Woolard added.

The FCA, which supervises banks and credit providers across the U.K., also said consumers using any of the temporary measures should not see their credit rating affected.

Coronavirus banner