This article is more than 6 months old

This article is more than 6 months old

UK banks including Royal Bank of Scotland, Lloyds and TSB are to offer repayment holidays on mortgages and loans, as part of relief measures for customers affected by the coronavirus outbreak.

The moves are part of efforts by UK banks to stem a potential tide of defaults if customers become ill, have to self-isolate or lose pay from employers and clients as the virus continues to spread.

The announcement from the UK lenders came after Italy declared it was suspending all mortgage repayments across the nation, following extended emergency measures that placed the entire country under lockdown.

Italy’s deputy economy minister, Laura Castelli, confirmed the debt relief measures on Tuesday, saying: “Yes, that will be the case, for individuals and households.”

A number of British banks have already signed off emergency loans for business customers in recent weeks, but fresh measures covering individual borrowers shows lenders are ramping up their contingency plans as the number of UK infections rises.

RBS Group, which is still 62% owned by the government and also includes NatWest and Ulster Bank, announced it will offer a three-month holiday on mortgage and loan repayment for customers affected by the outbreak. It will also allow customers to temporarily increase their credit card limit and access cash in fixed savings accounts with no early closure charges.

The bank is also offering to scrap fees on credit card cash advances and increase cash withdrawal limits up to £500.

Q&A How can I protect myself and others from the coronavirus outbreak? Show Hide The World Health Organization is recommending that people take simple precautions to reduce exposure to and transmission of the coronavirus, for which there is no specific cure or vaccine. The UN agency advises people to: Frequently wash their hands with an alcohol-based hand rub or warm water and soap

Cover their mouth and nose with a flexed elbow or tissue when sneezing or coughing

Avoid close contact with anyone who has a fever or cough

Seek early medical help if they have a fever, cough and difficulty breathing, and share their travel history with healthcare providers

Advice about face masks varies. Wearing them while out and about may offer some protection against both spreading and catching the virus via coughs and sneezes, but it is not a cast-iron guarantee of protection Many countries are now enforcing or recommending curfews or lockdowns. Check with your local authorities for up-to-date information about the situation in your area. In the UK, NHS advice is that anyone with symptoms should stay at home for at least 7 days. If you live with other people, they should stay at home for at least 14 days, to avoid spreading the infection outside the home.

A spokeswoman for RBS said: “We understand that there may be circumstances where a personal customer may fall into financial difficulty as a result of the impacts of coronavirus, for instance, loss of income. We will look to understand each customer’s situation on a case-by-case basis and can offer a number of options to help them manage their finances.”

High street rival Lloyds Banking Group and challenger bank TSB are offering similar relief. TSB is giving customers a chance to apply for mortgage repayment holidays for up to two months, request emergency credit limit increases, and gain early access to cash stuck in fixed rate ISA and bond accounts without incurring fees.

Lloyds, which also owns Halifax, Bank of Scotland and credit card brand MBNA, is giving customers emergency access to fixed term savings accounts and is offering to defer loan and mortgage payments. The banking group is also waiving fees on missed credit card payments, and allowing customers to deposit larger cheques online through digital scanning, assuming they are not able to access its branches.

Vim Maru, who is charge of Lloyds Banking Group’s retail operations, said: “We are making some temporary changes over the coming weeks, and will be providing individual support to customers who need extra help.”

Help on offer from other UK lenders is currently more limited.

Barclays is encouraging affected customers to contact its specialist support teams, and is offering to remove penalty charges for accessing fixed savings accounts. It will also allow customers to apply for temporary boosts to credit card limits.

HSBC has offered to defer mortgage payments for its Asian customers hit by the virus, but has not announced similar relief for UK borrowers. The bank, which counts Hong Kong as its largest market, warned last month that it may take a charge of up to $600m (£464bn) to cover the fallout from the virus.

Metro Bank and Santander UK said they would assess requests on a case-by-case basis.

On Monday RBS, which is to be rebranded as NatWest later this year, announced it was putting aside £5bn to cover emergency loans and scrapped borrowing fees for small businesses that are starting to struggle as the virus continues to spread.

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Lloyds Banking Group said on Tuesday it was earmarking £2bn-worth of loans for small and medium-sized businesses affected by the outbreak, scrapping any resulting fees and considering repayment holidays for the worst-affected companies.

Stephen Jones, the chief executive of lobby group UK Finance, said it was important for customers to ask for help early on if they start to struggle financially: “All providers are ready and able to offer support to their customers who are impacted directly or indirectlys: asking for help early is key.”

However, Gareth Shaw, Head of Money at Which?, said lenders must ensure that those who ask for help are not punished in the future with poorer credit scores.

“It’s important that customers who take up these offers don’t lose out,” he said, “as there is a risk that credit scores could be affected if the banks do not inform credit reference agencies of the changes.”