The FCA has put in place a package of support for people in difficulty to ensure help is available after 31 October 2020.
Due to the impact of the pandemic, many of those who have experienced changes in employment and increased stress are now likely to have low financial resilience. These consumers are more likely to fall behind on payments. 36% of respondents who already had low financial resilience, and had a mortgage, said they are likely to fall behind on mortgage payments; 36% of those with loans or credit cards are worried about repayments on these; and 42% of renters are worried about falling behind on rent payments.
Almost a third of adults (31%) have seen a decrease in income, with households seeing income fall by a quarter, on average. Those from a Black and Minority Ethnic (BAME) background were more likely to be affected, with 37% of BAME adults taking an income hit. Whilst survey results show that BAME adults are more likely to have reduced working hours, those aged between 25-34 are the most likely, by far, to have had a change in employment due to the pandemic. This will affect the take up of debt advice, with 19% of those aged 25-34 saying that they were more likely to seek debt advice in the next 6 months compared to 2% of those aged 55-64.
The FCA has been working with firms to ensure support is given to consumers who are in financial difficulty because of coronavirus. We recognise that the increasing coronavirus related restrictions placed on many areas of the UK in recent weeks may lead to increased financial difficulty for some people. The guidance is designed to ensure people can access tailored support which meets their individual needs, including taking account of local restrictions.
Support will be available both to those who have previously taken a payment deferral and those who are newly in financial difficulty, considering the specific needs of vulnerable consumers. Firms should work with customers to provide support before they miss payments. Given that people may be impacted in different ways, firms should be flexible and offer a full range of shorter and longer-term options, tailored to reflect customers’ individual circumstances. This could include:
Tailored support is also available to overdraft customers who are struggling financially due to coronavirus. Firms should also treat customers fairly – for example by not repossessing someone’s home when they are in lockdown and can’t access alternative accommodation.
For consumers who have previously taken a payment deferral, firms should offer a range of options for how missed payments will be repaid.
Every day we send out a free e-mail with the most important headlines of the last 24 hours.
Subscribe now
We welcome comments that add value to the discussion. We attempt to block comments that use offensive language or appear to be spam, and our editors frequently review the comments to ensure they are appropriate. If you see a comment that you believe is inappropriate to the discussion, you can bring it to our attention by using the report abuse links. As the comments are written and submitted by visitors of the The Paypers website, they in no way represent the opinion of The Paypers.