The watchdog has also called for arranged overdrafts up to £500 to be charged at zero interest for up to three months.

Unveiled today, the range of targeted temporary measures is designed as a stop-gap to quickly support users of certain consumer credit products who are facing a financial impact because of the exceptional circumstances arising from coronavirus.

The package is intended to complement measures already announced by governments to support mortgage holders and renters and the assistance being provided for furloughed employees and the self-employed.

The FCA added that consumers using these temporary measures should not have their credit rating negatively affected because of this.

The watchdog has also urged firms to make sure that all their overdraft customers are no worse off on price, when compared to the prices they were charged before the recent overdraft changes came into force.

Christopher Woolard, interim chief executive of the FCA, said: “Coronavirus has caused an unprecedented financial shock with far-reaching consequences for consumers in every corner of the UK. 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.

“If confirmed, these measures will provide a short-term, temporary stop-gap, for a period of up to three months. These measures would provide an expected minimum level of financial support for consumers who until now have been financially stable.

“They are not a substitute for our normal forbearance where that would be more suitable for a consumer in serious and immediate financial difficulty. Where consumers can still afford to make payments, they should as normal and this is likely to be in their best long-term interest to continue to do so.

“Lenders do not have to put these measures in place until they come into force. It may take a short period of time for lenders to put in place arrangements to provide these measures. Consumers should not contact their lender yet unless their lender is already offering voluntary assistance. The FCA expects to make a further announcement about these measures next week.

“This guidance would not prevent firms from offering more generous assistance to their customers, and some already are.”

Backing the announcement, Citizens Advice Scotland financial health spokesperson Myles Fitt said: “These are extraordinarily difficult times and people need every bit of help they can get.

“Everyone at this time should be focusing on their health and on preventing the spread of the virus, yet the evidence from calls to the CAB network suggests that many people are struggling financially.

“The package of measures outlined by the FCA today will help people through this crisis, so we support it.

“We would also urge that even further measures be considered, including the freezing of interest for people who qualify for a payment holiday.”

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