LONDON (Reuters) - British bank NatWest said on Wednesday it would extend the amount of time struggling customers have to repay unsecured loans or overdrafts by six months, as lenders start to step up support in the cost of living crisis.
The state-backed bank - which has 19 million customers - said low earners had been the most impacted by soaring inflation, with more than a million now spending more than 10% of their income on fuel or more than 30% on groceries, or both.
“Whilst we are not yet seeing significant increases in defaults or people in arrears, this new package of funding and measures is designed to provide on-the-ground support to communities," said NatWest CEO Alison Rose.
Britain is experiencing double-digit inflation with price rises at around 40-year highs and a wave of industrial action as pay hikes fail to keep pace.
NatWest said customers who have missed several payments on unsecured debts will have 24 months to repay from early February, up from 18 months.
The lender said it was also increasing funding for charities and groups that provide support including debt advice and access to affordable credit to 5.7 million pounds.
The British government and regulators have called on banks to do more to support households finding it difficult to make payments, and lenders have agreed to offer some help to mortgage borrowers.
However, the step so far have stopped short of the forbearance package offered to borrowers in COVID-19 pandemic lockdowns, which included widespread payment holidays.
(Reporting by Iain Withers; editing by Jason Neely)