Banks have been ordered to offer £500 interest-free overdrafts for customers who are struggling.
With millions worrying about making ends meet, it’s hoped the measures announced by the Financial Conduct Authority will help ease the strain.
Banks have until Monday to respond to the FCA about the plans, which would see repayments on loans and credit cards frozen for three months.
The 0% overdrafts up to £500 will also last for three months but interest will still have to be paid on the accounts of those who can afford it.
They must also give loan and credit card customers a break from payments to help ease the the financial strain of the coronavirus.
It will be up to the discretion of the banks to decide which customers are struggling and need help.
The new rules would come into force from Thursday, April 9.
The FCA also confirmed that the measures, if agreed, will not affect credit scores but do not extend to other high-cost credit loan sources such as payday loans. Customers will need to contact individual lenders if they are struggling.
The FCA announcement adds to the packages of financial help already in place including mortgage and rent three-month holidays.
“Coronavirus has caused an unprecedented financial shock with far-reaching consequences for consumers in every corner of the UK,” Christopher Woolard, interim chief executive of the FCA, said.
“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 challenging time.”
Read more: When does furlough pay start? UK rules explained
Meanwhile, those who currently cannot work are waiting to receive their furlough pay after Chancellor Rishi Sunak made history when he announced the government would be paying the wages of millions of Brits on furlough in the coronavirus pandemic.
Officially the Coronavirus Job Retention Scheme, it started on March 1 and is open to employers in the UK for at least the next three months.
Employers whose operations have had to close down temporarily because of the pandemic will be able to claim 80 per cent of their employees’ wages, up to a maximum of £2,500 a month.
It is open to any organisation with employees that started a PAYE payroll on or before February 28 this year.
Self-employed people will also be helped with earnings but this will not come into force until June.
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