NatWest provides debt extension for those struggling with repayment of overdrafts and some loans

Struggling NatWest borrowers were given an extra six months to repay unsecured loans and overdrafts.

The partially state-owned bank said it has not “yet” seen “significant” increases in the number of people who are in default or have debt, but the measure is designed to act as a support for communities.

As a result of the extension, starting early next month, NatWest customers who missed a few payments will have 18 to 24 months for refunds.

The government urged banks to do more to support customers.

chancellor jeremy hunt It met with major mortgage lenders last month to issue a warning, and then in late December it reportedly agreed on a series of leniency measures.

The policies used during the financial crisis are said to be among the tools used to help consumers struggling with debt, including diverting mortgage holders to interest-only deals and flat-rate deals, the Financial Times reported.

Those who earned the least were most affected by inflation, and more than a million of the bank’s 19 million customers currently spend more than 10% of their income on fuel or more than 30% on groceries or both.

NatWest also said it has increased its donations to £5.7m to charities and groups that provide debt advice and access.
suitable credit.

But the measure is less than the indulgence package It was offered during the pandemic when customers were offered a pay holiday.

The taxpayer owns a 48.5% stake in NatWest after it was bailed out by the government during the global financial crisis. It was only in June of this year that the state ceased to be a majority shareholder after selling some of its shares.

Bank of England forecast “important pressure” determined by the household’s ability to pay its debts.

“The risk of households in debt to default on loans or cut their spending sharply has increased,” the bank’s latest Financial Stability Report states.

More than 1.4 million fixed-rate mortgage clients facing significant hikes Monthly payments when deals expire this year, according to the Office for National Statistics. He said that 57% of fixed-rate mortgages coming in for renewal in 2023 are fixed at interest rates below 2%.

Consumers have difficulty as it passes through the UK double digit inflation and recorded the second largest decline in real wage growth Since registrations began, this means an effective pay cut for workers.

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