What the requirement means
A payment plan for a consumer experiencing financial difficulty is an agreed way of handling overdue payments or future instalments. A plan should follow an accurate account reconciliation and a realistic assessment of the consumer's ability to maintain payments, not simply divide arrears by a fixed number of months. Distinguish the relevant current requirement from supervisory guidance and future rules. A documented legal basis is especially important when one provider services products in several jurisdictions. UK FCA CONC rules do not apply automatically to every EU borrower. The presence of a contractual hardship clause is also not enough to demonstrate that the firm has carried out the individual consideration demanded by its applicable conduct rules. The file should state who has authority to make a decision and where the result can be challenged or reviewed.
Assessing the individual case
Separate a temporary payment schedule from a formal variation of the credit agreement, a refinancing arrangement and a statutory notice requirement. The legal consequences of each may differ. Record whether regular contractual instalments continue, whether arrears payments are additional, and the date the plan is expected to finish. Audit a sample of actual customer cases rather than relying only on a policy. Compare the information available at the time with the option offered and inspect notices and account movements afterward. Pay particular attention to whether automated recovery action continued after a forbearance decision. Supervisory evidence should show consistent routing, clear explanations and a reasoned outcome, without treating consistency as a reason to ignore different personal circumstances. A short review memo can identify the responsible staff member, applicable rule, exception and follow-up date.
Available responses and boundaries
UK CONC 7.3 requires relevant regulated firms to provide forbearance and due consideration. Its examples include an arrangement allowing a reasonable period to repay debt and reduced or token payments in suitable cases. A lender should not represent its own standard repayment term as a universal statutory rule. Distinguish the relevant current requirement from supervisory guidance and future rules. A documented legal basis is especially important when one provider services products in several jurisdictions. UK FCA CONC rules do not apply automatically to every EU borrower. The presence of a contractual hardship clause is also not enough to demonstrate that the firm has carried out the individual consideration demanded by its applicable conduct rules. The file should state who has authority to make a decision and where the result can be challenged or reviewed.
Cost and repayment consequences
Before proposing an amount, consider the information available about disposable income, priority obligations, essential living costs, payment frequency and likely duration of difficulty. A plan that appears mathematically sufficient but cannot be paid is not a satisfactory operational outcome. Document why any alternative was unsuitable. Audit a sample of actual customer cases rather than relying only on a policy. Compare the information available at the time with the option offered and inspect notices and account movements afterward. Pay particular attention to whether automated recovery action continued after a forbearance decision. Supervisory evidence should show consistent routing, clear explanations and a reasoned outcome, without treating consistency as a reason to ignore different personal circumstances. A short review memo can identify the responsible staff member, applicable rule, exception and follow-up date.
Reviewing an arrangement
Under CONC 7.3.5G, when a borrower complies with a repayment arrangement used as forbearance, a firm must reduce, waive or cancel further interest or charges insofar as necessary to stop the debt rising during that arrangement. Evaluate how the servicing ledger applies this rule and explain material cost consequences clearly. Distinguish the relevant current requirement from supervisory guidance and future rules. A documented legal basis is especially important when one provider services products in several jurisdictions. UK FCA CONC rules do not apply automatically to every EU borrower. The presence of a contractual hardship clause is also not enough to demonstrate that the firm has carried out the individual consideration demanded by its applicable conduct rules. The file should state who has authority to make a decision and where the result can be challenged or reviewed.
CCD2 and national implementation
Article 35 of CCD2 contemplates possible changes to repayment schedules, instalments and other contractual arrangements within the revised EU framework. Applicable national measures generally begin on 20 November 2026. Check the actual Member State implementation, transitional arrangements and product scope before adopting a future requirement as current law. Audit a sample of actual customer cases rather than relying only on a policy. Compare the information available at the time with the option offered and inspect notices and account movements afterward. Pay particular attention to whether automated recovery action continued after a forbearance decision. Supervisory evidence should show consistent routing, clear explanations and a reasoned outcome, without treating consistency as a reason to ignore different personal circumstances. A short review memo can identify the responsible staff member, applicable rule, exception and follow-up date.
Documentation and testing
Monitor whether the borrower receives understandable written terms, statements reflect the arrangement and automated collections messages stop when inappropriate. Schedule review when the customer's circumstances change. Preserve decisions, rejected options, interest treatment, customer communications and completion or breach of the arrangement. Distinguish the relevant current requirement from supervisory guidance and future rules. A documented legal basis is especially important when one provider services products in several jurisdictions. UK FCA CONC rules do not apply automatically to every EU borrower. The presence of a contractual hardship clause is also not enough to demonstrate that the firm has carried out the individual consideration demanded by its applicable conduct rules. The file should state who has authority to make a decision and where the result can be challenged or reviewed.
Frequently asked questions
Must the lender offer every type of forbearance?
No. The appropriate response depends on the circumstances and applicable rules.
When do revised CCD2 national provisions generally apply?
From 20 November 2026, subject to relevant national implementing measures and transitions.
Primary sources
FCA Handbook CONC 7.3 ↗Directive (EU) 2023/2225 ↗Read the source in its current version. National implementing measures and product-specific applicability may require additional research.