Credit card and loan repayment holidays extended as mountain of £ 6bn debt builds up

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This does not apply to auto financing, payday loans, leasing with an option to buy, pawnshop, or buy it now, which are covered by separate guidelines that the FCA has said it does. would update soon.

Richard Lane of the debt charity StepChange said the thousands of families struggling to meet their payments would be thrilled with the move – but a long-term solution was crucial as the economy entered what should be one of the worst recessions on record. .

“Unless new long-term support measures are put in place, this relief will be short-lived,” he said.

“Our own research has found that 4.2 million people have borrowed to make ends meet since the lockdown began, racking up a £ 6 billion tsunami in debt that is set to worsen if left unchecked.

“With many households wondering how they are going to make up for deferred payments, FCA must not let payment holidays end at a cliff where customers have to pay off their debt all at once. “

The companies provided 27 million interest-free overdrafts, 962,000 deferrals on credit cards and 690,000 interruptions on personal loans, according to banking organization UK Finance.

Household finances are in disarray with millions of people out of work or living on reduced income. Figures from the Office for National Statistics showed that claims for benefits hit a record 2.8 million, while more than one million businesses have resorted to the government’s leave scheme.

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