Updated FCA guidance for mortgage customers confirmed  

The FCA has this week confirmed the next stage of guidance for mortgage customers who have been financially affected by coronavirus.  Full guidance can be found on the FCA website.

Further guidance on measures for consumer credit is expected soon.

Payment deferrals

Since June, customers have been able to apply for a payment deferral and customers who have not done so (or those who wish to apply for another) have until 31 October to arrange this. For example, a customer could arrange a three-month payment deferral with their lender on 31 October, which would be in place until 31 January 2021.

After a customer’s payment deferral ends, firms will still be required to offer support for customers who need it, including offering further short and longer-term support reflecting individual circumstances. This could include extending the repayment term or restructuring of the mortgage. Where consumers need further short-term support, firms can continue to offer arrangements for no or reduced payments for a specified period to give customers time to get back on track.

Payment deferrals and credit files

Guidance published in June made clear that payment deferrals would not have a negative impact on customers’ credit files. It is important to note that factors other than credit files can be used by lenders to use to make lending decisions.

The new guidance published this week states that firms are expected to resume normal credit reporting at the end of a payment deferral taken under the June guidance, and that new support a customer receives may be reflected on their credit file. Lenders are expected to let customers know how new support will be shown.


Emerging from Lockdown report

A new report from Standard Life Foundation shows how household finances have been affected since the beginning of the pandemic. This report is the third in a series analysing the impact of Covid-19 on personal and household finances, and shows that by July (when the research was conducted), a third of households surveyed reported a fall in income as a direct consequence of the pandemic and that up to 1.6 million UK households could need debt advice when payment breaks come to an end. The report also provides detail into the impact of government support schemes, how savings have been affected and more.