Payment holidays were first brought in as a measure to help those affected by the COVID-19 crisis. Introduced in March, Britons have been able to apply to temporarily halt payments of key bills and debts in order to get back on their feet again. Payment holidays have helped in many areas including mortgages, credit cards and personal loans.
However, the support as it currently stands is scheduled to conclude tomorrow, meaning many households will need to look into alternative arrangements.
For those who do wish to benefit from a payment holiday which could carry them into the start of 2021, quick action is necessary.
Firstly, people should contact their lenders as soon as possible to let them know they are experiencing payment difficulties.
Thankfully, the process should be expedited, meaning Britons should not have to wait too long to get a decision on a payment holiday.
READ MORE: State Pension: Britons set to receive a Christmas Bonus to their sum
But this form of protection is also scheduled to end tomorrow, meaning any new payment holidays will be reported on a credit score.
The Financial Conduct Authority (FCA) has confirmed lenders can take payment holidays into account when making decision on acceptance going forward.
However, it is also still worth noting that a payment holiday could cost a person more in the long term.
This is because throughout the period of pause, interest will continue to accrue on repayments.
“If you don’t really need a three month holiday, don’t do it, or take a shorter break, or make some voluntary repayments if you can.”
If a person has, however, already taken a payment holiday, this does not have to be the end of the support they can receive.
The FCA has explained tailored support should still be provided by lenders to individuals who may still need more assistance.
This could involve a variety of approaches, including an additional deferral of a payment, an extension to a repayment period, or a period of time where payments can be reduced.
Britons who are still struggling to meet their debt should not suffer in silence, and approaching a free debt advice charity, such as StepChange is always recommended.