Payment holidays and coronavirus
Can I get a credit card payment holiday?
New rules, including payment holidays, are being introduced to help people whose finances have been affected by coronavirus.
The Financial Conduct Authority (FCA) has announced a range of changes affecting consumer credit. The following have been made available for three months:
- Interest-free overdrafts up to £500
- Payment holidays for credit cards, loans, store cards and catalogues, car finance, hire purchase and high cost credit
Payment holidays relating to coronavirus won’t affect your credit score.
The Scottish Government has extended the ‘moratorium’ period for people who have debts from six weeks to six months. During this time creditors aren’t able to take action to recover the money owed. If you're considering a moratorium, you don't need to get debt advice from an approved money adviser, but we do recommend you do so.
Can I get a mortgage payment holiday?
Mortgage payment holidays are in place for people who are struggling with their repayments. You can apply for one if you've kept up-to-date with your payments. You don't need to provide proof of how your finances have been affected by COVID-19.
There are other ways your lender may be able to help you, such as allowing you to reduce payments.
You can request payment breaks even if coronavirus hasn't affected you. Find our more about dealing with mortgage arrears.
Can I get a break from paying my rent?
The Scottish Government has extended protection for people renting. If your landlord wants to evict you for rent arrears, they'll need to give you six months' notice before they can start court proceedings.
In England and Wales, the courts have suspended all repossession proceedings. However, your rent is still payable during this time. You can ask for a payment break, but there's no guarantee the local authority or landlord will agree.
Read our guide to dealing with rent arrears.
Have you been furloughed, made redundant, or had your income reduced because of coronavirus? Read our guide to dealing with reduced income.
How do I ask for a payment holiday?
If you’re considering asking for a payment break, you’ll need to give your bank, local authority or landlord some information to support your request.
They’ll probably want to know about your income, living expenses, any other debts and any change to your financial situation. You do this by creating an income and expenditure form based on your budget.
You'll need to tell your creditors the reason you're asking for a payment break and when you'll be able to start making normal payments again.
If your creditors agree to a payment break, ask them to send you a letter or email to confirm this.
Payments you should have made will need to be paid after the payment break ends, either by increasing the amount of your future payments, or by adding extra months to the end of the agreement so it takes longer to pay back.
Be prepared that creditors may not agree. If they don’t, contact us and we can look at alternative ways to help you deal with a short-term debt problem. Some creditors will point you towards a free debt advice agency like us anyway if you contact them to ask for a payment break.
You can use our online debt advice tool to help you put together a budget to send to your creditors.