Loan and Credit Card Payments Will Be Freezed for Three Months in the UK | Silver

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The financial regulator has announced plans to freeze loans and credit cards for up to three months as part of the emergency measures for consumers affected by the coronavirus epidemic.

The measures, which would generally require a long consultation, could come into force on April 9. The Financial Conduct Authority said the process was accelerated “given the national emergency and the significant impact on consumer finances at the moment.”

It is aimed at consumers and tenants who do not benefit from the existing emergency measures which have targeted owners – with paid holidays – or business owners.

Income subsidies

Direct cash grants for the self-employed, accounting for 80% of average profits, up to £ 2,500 per month. There are similar wage subsidies for employees.

Business loan guarantees

The government will support £ 330 billion in loans to support businesses through a Bank of England program for large businesses. There are loans of up to £ 5 million interest-free for six months for small businesses.

Business rate

The taxes levied on commercial premises will be eliminated this year for all retailers, leisure shops and businesses in the hotel sector.

Cash grants

The 700,000 smallest UK businesses eligible for £ 10,000 cash grants. Smaller retailers, leisure and hospitality businesses can get larger grants of £ 25,000.

Advantages

The government will increase the value of universal credit and tax credits by £ 1,000 a year, as well as expand eligibility for these benefits.

Sickness benefit

Statutory sickness benefit must be available from the first day, rather than the fourth day, of absence from work, although ministers have been criticized for not raising the level of sickness benefit above £ 94.25 per week. Small businesses can request state reimbursement of sickness bills.

Other

Local authorities will get a £ 500 million fund to provide people with tax relief for the city council.

Mortgage vacations and rentals available for up to three months.

The proposals include a temporary freeze on loans and credit card payments for consumers facing financial difficulties as a result of the epidemic.

FCA said consumers who risked having their credit cards suspended due to the regulator’s new affordability rules would not lose access to their accounts.

Lenders are also expected to waive interest charges on overdrafts arranged up to £ 500 over the same period, which would extend the relief already announced by some banks, including Barclays, HSBC and Lloyds.

Consumers who use unauthorized overdrafts would also benefit. Most banks have started charging a single interest rate of 39.9% for unauthorized arranged overdrafts under new rules to normalize fees this month.

But FCA’s emergency measures force companies to make sure that all customers are “no worse off” because of the changes, which means that some customers may come back to lower interest rates.

Banks and credit card providers will need to ensure that consumer credit scores are not affected by any of the measures, said FCA.


FCA Interim President and CEO Christopher Woolard said: “The coronavirus has caused an unprecedented financial shock with far-reaching consequences for consumers across 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.”

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