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Forbearance in the face of a pandemic

Updated: May 22, 2021

The FCA continues to focus on the consumer credit market in light of the ongoing pandemic and the effect it is having on retail borrowers. In a speech this week on the FCA’s priorities for the credit market, Jonathan Davidson, Executive Director of Supervision with Retail and Authorisations discussed expectations of firms in showing forbearance to and recognising vulnerability in its customers.


Mr Davidson picked out two key areas where vulnerability is increasing due to the pandemic. The first is reduced financial resilience with many consumers having low or no savings and the second is understandably increased mental health issues, which sees consumers make poor financial decisions.



The FCA expects consumer credit firms to adapt quickly to these rising issues and has set out key outcomes it would like to see in relation to firms showing forbearance. These outcomes revolve around ensuring that firms recognise and respond to vulnerability in their customers and that all customers have time to access the right advice in relation to their debt, so that reasonable, sustainable repayment plans can be put in place.


The FCA understands that dealing with forbearance well and treating customers fairly will be operationally challenging for firms. Over the next few months, Supervision will be considering how firms have planned, resourced and trained their staff to manage this process well.

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