New research by the FCA has revealed how vital mortgage holidays were in the wake of the pandemic – with two-fifths of borrowers saying they would not have been able to cope without them.
The FCA survey found that four out of every 10 people with a mortgage that opted for payment holidays would have found it almost impossible to meet repayments had the policy not been introduced. The research indicates that over one quarter of all adults in the UK have been left in a fragile financial position by the COVID-19 pandemic.
Furthermore, it also suggests that over half of UK adults would be classified as financially vulnerable as a consequence of it – adding up to around 27.7 million in total. The first part of the FCA research was conducted during February last year, and the second part in October, with the number falling into that category rising by 15% across that period.
The findings reveal that one out of every six adults with a mortgage opted for a payment holiday at the height of the pandemic, with two thirds of them saying that the mortgage lender they borrowed from had been sympathetic.
Karen Noye from the Quilter mortgage advice firm pointed out that, although the pandemic had clearly had a severe financial effect on many, the majority of those who chose to take deferrals were people who already had debts. She added that this showed that debt across society was arguably the biggest problem.
CeMAP mortgage advisor training helps advisors support clients with debt.