Question to the HM Treasury:

To ask Her Majesty's Government what steps they are taking to provide support to people who have fallen behind on their credit card and bill payments as a result of the COVID-19 pandemic.

The Government recognises that the outbreak of COVID-19 may lead to consumers facing financial difficulty and uncertainty.

The major banks and building societies have pledged to provide relief to customers impacted by COVID-19, including deferring mortgage and other loan repayments, waiving fees on savings accounts, and increasing overdraft or credit card limits.

On 9 April the Financial Conduct Authority (FCA) also announced a series of measures intended to provide emergency support to consumers who are facing temporary cash flow problems as a result of the coronavirus outbreak. These measures came into force on Tuesday 14 April.

These measures include, allowing consumers either a 3-month payment holiday or to make nominal payments towards credit cards, store cards, catalogue credit and certain personal loan agreements. It is important to note that lenders can continue to charge interest during this 3-month period. Customers should contact their lender if they are experiencing short-term cash flow problems and would benefit from these measures.

In their guidance for firms, the FCA set out their expectation that the payment deferrals described here should not worsen the arrears status of a consumer’s credit file during the payment deferral period.

The Chancellor has also announced a wide package of economic support measures including the Self-employment Income Support Scheme and the Coronavirus Job Retention Scheme, to support businesses and consumers during this pandemic.