Further taxi finance payment holidays look unlikely as FCA releases latest proposals

Image credit: @MMogardo

An extension to the six month taxi motor finance payment holidays looks unlikely as FCA releases latest statement.

Following the announcement of the latest government restrictions in response to the COVID-19 outbreak, the Financial Conduct Authority (FCA) has proposed new updates to its temporary guidance on motor finance, personal loans, credit cards and other forms of credit to support consumer credit customers financially affected by coronavirus. 

To support those financially affected by coronavirus, the FCA will propose that consumer credit customers who have not yet had a payment deferral under the 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 new proposals borrowers who are currently benefitting from a first payment deferral under the July guidance would be able to apply for a second deferral. 

The news however is not good for taxi drivers and other professionals who have already taken the full six month payment break and find their trade decimated by COVID-19 restrictions imposed both regionally and nationally since March.

Cabbies and other motorists who have already benefitted from payment deferrals and are still experiencing payment difficulties are being urged to speak to their lender to agree tailored support. Any reduction in the amount payable is now however likely to impact the customer's credit rating.

The FCA says: “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.”

There has been pleas for financial support across the UK for the taxi industry. One of London’s taxi representatives suggested that the Government needs to support the industry now or risk ‘ruin for too many people’ should the trade be left to its own devices.

Steve McNamara, LTDA General Secretary, wrote in the latest TAXI NEWSPAPER: “The Chancellor keeps saying he can’t save every business, and I get that, but he also said he will intervene where there are ‘viable’ businesses that are simply struggling because of reduced demand as a result of the pandemic. That is the taxi trade down to a tee. We need more support than is currently on offer to get through the next few months and then we can pick up where we left off.

“Leaving us to our own devices and picking up the pieces in the Spring or whenever we start to get back to some kind of normality, would mean ruin for too many people.”

In Northern Ireland, all taxi drivers are to be handed a £1,500 grant on top of any Self-Employed Income Support Scheme (SEISS) funding that they may receive to help them pay the costs associated with running a taxi.

In Liverpool and surrounding areas a fund has been created by local authorities to help cab drivers through the pandemic.