The FCA is also reminding customers that if they can afford to resume payments, they should do so.

For customers still experiencing temporary payment difficulties due to coronavirus, firms will offer support, with options including a full or part payment holiday for a further three months. Customers yet to apply for a payment holiday have until 31 October 2020 to do so.

The FCA has confirmed that customers that have not yet had a payment holiday and who experience financial difficulty have until 31 October 2020 to request one.

The current ban on lender repossessions of homes will be continued to 31 October 2020. This will ensure people are able to comply with the government’s policy to self-isolate if they need to.

Firms will communicate with customers regarding what happens when their payment holiday ends. They should offer a range of options for how the missed payments will be repaid, if they are able to resume payments.

Lenders will continue to support customers who have already had a payment holiday where they need further help. Firms should contact their customers to find out what they can re-pay and, for those who remain in temporary financial difficulty, offer further support, which will include the option of a further three-month full or part payment holiday.

Payment holidays offered under this guidance will not have a negative impact on credit files. However, consumers should remember that lenders may use information obtained from other sources, such as bank account information, in their lending decisions.

Depending on the customer’s circumstances, firms may make them aware of self-help steps a customer may take or signpost customers towards sources of debt advice. This will be for anyone concerned about managing their money during coronavirus and wants to find out what steps to take to get back on track.

When implementing this guidance, firms should be particularly aware of the needs of their vulnerable customers and consider how they engage with them. For customers who aren’t able to use online services (such as digital channels), firms should make it easy for customers to access alternatives.

Christopher Woolard, interim chief executive at the FCA, said: “The measures we have confirmed today will mean anyone who needs to can get help from their lender, if they are still struggling to pay their mortgage due to coronavirus.

“It is important that if a consumer can afford to re-start mortgage payments, it is in their best interests to do so. Customers should talk to their firm about the best option available for them.”

This guidance comes into force on 4 June 2020 and only applies to mortgages. It does not apply to consumer credit products which are covered by separate guidance which will be updated in due course.

Citizens Advice Scotland (CAS) has warned that without additional support from lenders, people taking payment holidays from their mortgage face more expensive repayments in the long-term.

The charity highlighted that any missed payments get added onto the mortgage and interest is still charged on the mortgage during the payment holiday. 

These missed payments and additional interest will mean increased payments for consumers at a later date.

CAS financial health spokesperson, Myles Fitt, said: “This updated guidance from the FCA is welcome news in the short term for people who are struggling to make mortgage payments as a result of coronavirus.

“But it’s important to remember that interest on mortgages is still building up when you take a payment holiday and the missed payments have to be paid back. This could leave people out of pocket in the long-term which will only add to their hardship.

“What would really make a difference to people in financial hardship would be the freezing of interest by mortgage lenders during payment holidays.

“We’ve also seen one lender voluntarily announce a year long hold on repossessions. All mortgage lenders should be offering this otherwise there is the threat of repossession once payment holidays come to an end for people who are still in difficulties and who just need a bit longer to recover.”

• Read all of our articles relating to COVID-19 here.