Coronavirus: help and support if you are affected

Posted by: Sharon MacPherson on March 19 2020 | Tagged:

From 1 April 2021, if you're struggling financially as a result of coronavirus, we will provide tailored support that will take into account your individual circumstances. 

This support will be available if you’re struggling for the first time, or if you’ve already received support, such as a payment holiday, that’s coming to an end (or has ended).

We will:

  • work with you to provide support before you miss payments
  • be flexible and use a range of short and longer-term options to support you – this could include a period of no payments or reduced payments
  • give you time to repay what you owe and not pressurise you into repaying your debt within an unreasonably short period of time 
  • direct you to debt help or money guidance, and allow you to access debt advice before deciding on the support you take
  • where appropriate, put in place a sustainable repayment plan that is affordable and considers your wider financial situation (including other debts and essential living expenses)
  • prevent your debts from escalating (once a repayment plan is in place) by suspending, reducing, waiving or cancelling any interest, fees or charges to make that happen

Remember, your options will depend on your circumstances. 

When assessing what options are best for you (including the amount you can afford to repay) your we will consider your essential living expenses, which could include:

  • mortgage payments, rent and council tax
  • reasonable food, clothing, health care and travel costs 
  • other costs, where non-payment could result in the loss of your home or essential goods or services 

If you need tailored support from us this may be reflected on your credit file in line with normal reporting processes. 

This will help make sure lenders have an accurate picture of your financial circumstances and reduce the risk of unaffordable lending.  We will be clear about what this support could mean for your credit file.

Contacting Us

Don’t wait until you miss a payment, contact us as soon as possible if you’re finding it difficult to manage your finances. We will respond as quickly as possible but, due to high levels of demand and staff having to work from home, service levels might be slower than usual.

Before agreeing on any support, we may need to collect information on your circumstances and should give you enough information so you can make an informed decision. 

It’s important to be open and honest about your financial situation with us, so we can agree an option that's right for you.

Payment holidays

Until 31 March 2021, you can apply for a payment holiday under the Financial Conduct Authority (FCA) Payment Deferral Guidance.

A full payment holiday (also called a freeze or deferral) is a period of time agreed with your lender when you don’t have to make any payments. A partial payment holiday is when your lender lets you make reduced payments for a period of time. 

Payment holidays are designed to help you if you you’re finding it hard to make payments, in this case because of coronavirus. 

However, it’s important to remember that:

  • when your payment holiday ends, you’ll still have to pay back what you owe
  • interest will continue to build – unless your lender has told you otherwise – so your repayments may increase after the holiday
  • if you take a payment holiday, you will likely end up paying more in the long term

If your financial position improves, you can avoid extra costs by paying what you can.

Applying for a payment holiday

If you haven’t taken a payment holiday, or you’ve taken payment holidays of less than 6 months, you have until 31 March 2021 to apply for another payment holiday under the Payment Deferral Guidance.

All payment holidays taken under that guidance must end by 31 July 2021. 

After 31 March 2021, you can apply to extend an existing payment holiday up until 31 July 2021, as long as: 

  • it doesn’t go over the 6-month payment holiday limit, and
  • there are no breaks in the support

You won’t be eligible to apply if you’ve already had payment holidays of 6 months overall. Instead, we will consider tailored support, which could include a payment holiday if it's appropriate to your circumstances.

Remember, carefully consider if you need a payment holiday – and make payments if you can.

We can only agree a payment holiday of up to 3 months at a time. We can also only agree to give you a payment holiday of 6 months in total. This 6-month period includes any payment holiday you may have taken previously. 

That means we can agree to renew your payment holiday after the first 3 months, as long as the total length of all your holidays doesn’t exceed 6-months. 

We may also decide that a payment holiday isn’t in your best interests. If that is the case, we will instead offer support tailored to your individual circumstances.

Please note, you won’t be eligible for a payment holiday under the Payment Deferral Guidance if you’re in arrears that aren't related to coronavirus. If you’re already receiving tailored support, you should continue to receive this. This may also include allowing you to temporarily defer payments, if that is appropriate to your circumstances. 

Payment holidays and your credit file

We won't report payment holidays, agreed under the FCA Payment Deferral Guidance, as missed payments on your credit file. This should help to minimise the impact on your future credit prospects if you’re able to get back on track at the end of a payment holiday.

However, you should remember that credit files aren’t the only source of information that lenders can use in lending decisions. 

Factors other than payment history may also be relevant. For example, lenders may consider your bank account information, your use of credit products, or how much you are in debt, when making a lending decision.

If, after taking payment holidays of 6 months, we agree that you can continue to temporarily defer payments, this may be reported to your credit file in accordance with normal reporting processes. If we agree to provide you with more support, we will tell you what this means for you and your credit file.

Coming to the end of a payment holiday

We will contact you about what will happen when your payment holiday ends. If you continue to face difficulties because of coronavirus, we will provide you with tailored support. 

If you can start to make repayments, it’s in your best interests to do so. We will work with you to find the best way of catching up on missed payments.

Where to find help managing money and debt

Find out more about managing money and debt if you've been affected by the coronavirus pandemic.

This information might also be helpful to you if you were struggling to make payments before the pandemic, if you’re in longer-term financial difficulty, or if you’re worried about how you will manage your payments and debts in the future.

For more information on managing your money during and after the coronavirus pandemic, you can also use the Money Advice Service’s Money Navigator Tool.

Vulnerable consumers 

We will consider the needs of customers who may be vulnerable. 

Circumstances that may cause you to become vulnerable include:

  • poor health (physical or mental)
  • low financial or emotional resilience
  • life events such as bereavement or divorce
  • low capability, including poor digital skills (such as your ability to communicate and make transactions online), language and cognitive skills, and low financial capability

Coronavirus, and the measures introduced to help manage the pandemic, such as local restrictions, may affect personal circumstances in ways that could cause vulnerability. We are aware that your circumstances could change quickly in a way tht could make you vulnerable.  

If you think you’re in circumstances that mean you’re vulnerable, it’s important to let us know when you contact us, so we can work out how best to support you.