Lenders provide over one million payment deferrals on credit cards

Lenders provide 1.05 million payment deferrals on credit cards and 707,000 payment deferrals on personal loans
Over 27 million customer accounts offered the option of interest-free borrowing for three months on the first £500 of their arranged overdraft
Banking and finance industry reiterates its commitment to provide ongoing support to customers coming to the end of their credit support arrangement.

Lenders have provided over one million payment deferrals on credit cards to help customers whose finances have been affected by Covid-19 over the past three months, according to figures published today by UK Finance.

The trade body's members have also provided almost 707,000 payment deferrals on personal loans for customers impacted by the pandemic. In addition, over 27 million customer accounts have been offered three months of interest-free borrowing on the first £500 of their arranged overdrafts if needed.

This unprecedented support for consumer credit borrowers has been put in place by the banking and finance industry and Financial Conduct Authority (FCA) to help people facing temporary financial pressures due to the Covid-19 outbreak. It forms part of a clear plan by the industry to help the country through these tough times, including granting 1.9 mortgage payment deferrals, increasing the contactless limit to £45 and providing £46 billion of lending to over 1.1 million businesses through government Covid-19 lending schemes.

On 1 July 2020 the FCA published guidance outlining the next steps for customers who are coming to the end of their credit support arrangement. Those customers who are able to return to making regular payments are encouraged to do so as soon as possible, as this will keep down the overall cost of borrowing. For customers with longer-term financial difficulties, lenders are offering continued help and flexibility to suit their needs.

Customers who have been granted payment deferrals will be contacted by their credit card providers before the end of the three-month period to plan their next steps. Depending on their circumstances they may be offered further support in the form of full or partial payment deferrals or other arrangements that help support them through this difficult period.

Those customers who are yet to request a payment deferral or an arranged interest-free overdraft of up to £500 will have until 31 October 2020 to apply for one. Customers are reminded that a payment deferral may not be the right choice for everyone, and lenders have a range of options to help.

Eric Leenders, Managing Director of Personal Finance, UK Finance, said:

Many borrowers facing financial pressures are taking up the measures being offered by lenders to help them get through this crisis.

?The banking and finance industry has a clear plan to help the country through these tough times and is committed to providing ongoing support to those customers who need it.

?Each customer will face a unique set of circumstances. But no matter what your situation, if you are facing temporary financial difficulties due to the coronavirus pandemic there will be support still available to help you through these challenging times.

Notes to editor

For more information please call the UK Finance Press Office on 020 7416 6750 or e-mail <a href="mailto:press@ukfinance.org.uk">press@ukfinance.org.uk</a>.
<ol><li>Figures from UK Finance members show that 1.05 payment deferrals had been granted on personal credit card accounts, 707,000 payment deferrals had been granted on personal loan accounts by 9 July 2020. Interest-free overdraft buffers have been applied to 27,200,000 personal current accounts by the same date, both in response to customer requests and on a portfolio basis. The data reported above relates to figures provided by UK Finance members representing 51 million credit card accounts and almost nine million personal loan accounts.</li>
<li value="2">UK Finance is the collective voice for the banking and finance industry. Representing more than 250 firms across the industry, we act to enhance competitiveness, support customers and facilitate innovation.</li>
<li value="3">The banking and finance industry has put in place a clear plan to help Britain through</li>
</ol><ul><li>1.9 million <a href="https://eur01.safelinks.protection.outlook.com/?url=https%3A%2F%2F74n5c… payment deferrals</a></li>
<li><a href="https://www.ukfinance.org.uk/press/press-releases/uk-finance-responds-f… million interest-free overdrafts</a> offered, over one million payment deferrals on credit cards and 707,000 payment deferrals on personal loans.</li>
<li>£46 billion of lending to over 1.1 million businesses through government Covid-19 lending schemes</li>
<li>Protecting customers from <a href="https://eur01.safelinks.protection.outlook.com/?url=https%3A%2F%2F74n5c… and fraud</a></li>
<li>Higher limit for<a href="https://eur01.safelinks.protection.outlook.com/?url=https%3A%2F%2F74n5c…; contactless payments</a></li>
</ul><ol><li value="4">More information on credit card and personal loan payment deferrals is available <a href="https://eur01.safelinks.protection.outlook.com/?url=https%3A%2F%2F74n5c…;
<li>In implementing the interest free overdraft buffer, some firms have decided to apply this to all arranged overdrafts automatically, irrespective of whether this is the customers? primary account. Consequently, the percentage of customers with access to this support is high.</li>
<li>For those customers who require it, free debt advice is available from the Money Advice Service <a href="https://eur01.safelinks.protection.outlook.com/?url=https%3A%2F%2F74n5c…;
</ol> 
Comment piece on personal finance advice to consumers
The past few months has been a period of great financial uncertainty for many families up and down the UK. The country may now be beginning to re-open, but it is likely that the economic impact of the crisis will go on for some time yet and that many households will continue to see their finances squeezed.
Throughout the Covid-19 crisis, the UK?s banking and finance industry has been supporting people?s financial wellbeing . We have been working in partnership with the government and regulators to support the British people, and we?ve put forward a range of measures, from mortgage, credit card and personal loan payment deferrals to interest free buffers on overdrafts up to £500, all of which can provide people with vital breathing space. We?ve also raised the payment limit on contactless cards to £45 to support consumers who choose to pay using contactless at this time.
Many borrowers across the UK are taking up the support we have on offer, helping them get through the crisis. But some may still be unsure what relief is available or what the next steps are.
We want to reassure these customers that we have a clear plan to help the country through these tough times and are committed to providing ongoing support to those customers who need it.
Each customer will face a unique set of circumstances. But no matter what your situation, if you are facing temporary financial difficulties due to the coronavirus pandemic, there is support still available to help you through these challenging times:
Mortgage payment deferrals
For homeowners struggling to make their mortgage payments during lockdown, we?ve introduced a mortgage payment deferral scheme.
Since the scheme was introduced, 1.7 million deferrals have been granted.
The scheme, which was originally earmarked to finish at the end of June, has been extended for a further four months. This move ensures support continues to reach every borrower in need. Customers who have not yet applied for a deferral, but feel they would benefit from one, can still apply until 31 October 2020. Similarly, the freeze on repossessions for residential and buy-to-let customers has been extended to the end of October, giving borrowers reassurance that they will not have their homes repossessed at this difficult time.
For those currently on the mortgage payment deferral scheme, there are still a range of options available. These include taking a full or part payment deferral for a further three months, moving to interest-only payments or extending the term of your mortgage to spread out the cost of borrowing.
Mortgage providers will be in touch with customers who have been granted a payment deferral before the end of the three-month period to tell you what happens next and what further support is available.
We always advise homeowners to pay back their mortgage if you can, even if you can only pay some of it. This will reduce the size of repayments in the longer-term, as you will still owe the money where a payment deferral has been granted and interest will continue to accrue. But for those facing difficulties, assistance is still available.
Credit card payment deferrals
For credit card holders experiencing temporary financial hardships, we have worked with the regulator to introduce payment freezes.
Three months in, and just over one million credit card customers have been granted a payment deferral on their card.
The scheme has now been extended, so there is still time to access this support if you need it. Customers can apply up to 31 October 2020.
Customers who have been granted payment deferrals will be contacted by their credit card providers before the end of the three-month period to plan their next steps. Depending on your circumstances you may be offered further support in the form of full or partial payment deferrals or other arrangements that help support you through this difficult period
Customers who are able to return to making regular payments are encouraged to do so as soon as possible, as this will keep down the overall cost of borrowing. 
For those customers who need it, free and impartial debt advice is available from the Money Advice Service.
Overdrafts
Customers are being offered a three-month period of interest-free borrowing on the first £500 of their overdraft on primary current accounts.
This facility has been applied to more than 27 million accounts so far, meaning that customers will see any interest waived for the first three months.
In acknowledgement of the continued hardships people are facing, this offer has been extended for three months until the 31 October 2020.
Many account providers have applied this facility across accounts automatically, but if your bank or finance provider hasn?t, please speak to them if you would like to apply for this offer or If you need further support for any borrowing over the £500 interest free buffer.
Personal loan payment deferrals
The industry has also worked with the financial services regulator, the Financial Conduct Authority (FCA), to make payment deferrals available to personal loan customers. These measures are helping to support people facing temporary financial difficulties.
Almost 700,000 customers have been given financial relief thanks to this support measure since it was introduced.
For customers who were struggling before the pandemic, banks and other financial institutions stand ready to help and we would urge you to get in touch to explore your options.
For all payment deferral measures and interest-free borrowing available, we would always encourage customers to consider carefully if this is the right option for them. If you can, it is always advisable to make your mortgage, credit card and loan payments as interest will still accrue on these during a payment deferral.
Customers should not cancel their direct debits or standing orders on any financial commitment before a payment deferral has been agreed. This will be counted as a missed payment and could negatively impact your credit file