To protect vulnerable members of the public from further harm, the Financial Conduct Authority has updated its guidance to finance companies to offer payment holidays to customers experiencing payment difficulties as a result of the coronavirus pandemic. Consumers will now have until 31 March 2021 to apply for an initial or a further payment deferral.9
Although customers who are struggling to keep up payments for personal loans, credit cards and other credit products will be safeguarded against repossession of cars and homes, financial education among the public will remain critical. Simply stopping payments can affect credit ratings with credit providers generally asking customer to contact them in order to discuss a payment deferral. The onus is on the customer, whereas providers could be more proactive to anticipate customer needs.
As we gear up for 2021, savings inequality and credit dependability look set to accelerate. While some may be looking into their next investment proposition, many will be keeping a close eye on new ‘buy now, pay later’ schemes.