Consumers left in financial difficulty by the coronavirus crisis should be offered a three-month freeze on the repayment of credit cards and loans under emergency plans by the city’s watchdog.
The Financial Conduct Authority (FCA) also said that affected people who had overdrafts should be charged zero interest for three months.
Customers should not have their credit rating affected if they have to use one of the temporary measures, said the watchdog.
The plans build on measures already announced by the government to support mortgagees, tenants, temporarily laid off workers and the self-employed during the crisis – which has crippled much of the economy.
FCA said it would provide a “short-term temporary stop” offering assistance to clients “who until now were financially stable.”
She added that the guidelines would not prevent lenders from offering more generous assistance – as some already did.
Christopher Woolard, Acting Chief Executive Officer of the FCA, said: “The coronavirus caused an unprecedented financial shock with far reaching consequences for consumers all over the UK.
“If confirmed, this package of measures we are proposing today will help provide affected consumers with the temporary financial support they need to help them weather the storm during this difficult time.” “
Vim Maru, director of retail at the Lloyds Banking Group – which includes Lloyds Bank, Halifax and Bank of Scotland – said: “We welcome today’s advice from the FCA and continue to work closely with them during this unprecedented period.
“Since the start of the pandemic, we have helped thousands of clients to use the temporary supports already introduced. “