THE Financial Conduct Authority  will issue updated advice later this week regarding help for people who are struggling to meet motor finance payments as we head into a second national lockdown.

The FCA said that following the announcement of the latest Government restrictions in response to the coronavirus outbreak, it will propose updates to its temporary guidance to support consumer credit customers financially affected.

It added that it is important that consumer credit customers who can afford to do so continue to make repayments. Borrowers should only take up this support if they need it.

The Authority will propose that consumer credit customers who have not yet had a payment deferral under its July guidance can request one. This could last for up to 6 months unless it is obviously not in the customer’s interests. Under the proposals borrowers who are currently benefitting from a first payment deferral under the July guidance would be able to apply for a second deferral.

It added that it will work with trade bodies and lenders on how to implement these proposals as quickly as possible.

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, and will make another announcement shortly.

In the meantime, consumer credit customers should not contact their lender just yet. Lenders will provide information soon on what this means for their customers and how to apply for this support if our proposals are confirmed.

Stephen Haddrill, Director General of the Finance and Leasing Association, said that a six-month deferral  could leave people with unsustainable debts that they may struggle to repay.

He added: “The FCA should limit its guidance on payment deferrals to three months at this stage as it did in March, so that there can be a full review of the policy by the FCA, and of individual circumstances by lenders before any extension. Without this, some people will continue deferring payments and accruing debt to their extreme detriment.

“If HM Treasury and FCA press ahead with a deferrals policy until the end of March 2021 in spite of these risks, then furlough should also be extended well beyond one month to give more people a realistic chance of being able to better manage their repayments in the interim.”