Can you tell me more about my Persistent Debt Paydown Plan?

If you've received a communication from us that confirms your Paydown Plan amount, please click here for answers to the questions you might have.

If you’ve received a communication from us that gives you an estimated Paydown Plan amount and you’d like to know more about how the plan will work, please see below.

Why have I received this communication from you?

If you’ve received a Paydown Plan communication from us, it means that you’ve continued to make the minimum payment, or close to the minimum amount, and your account remains in Persistent Debt. You can find more information here

Being in ‘Persistent Debt’ is the term our regulator – the Financial Conduct Authority (FCA) – uses to refer to any customer who pays more in interest, fees and charges than the cost of their purchases within an 18-month period.

Your Paydown Plan will request a fixed payment to ensure your outstanding balance is paid in full in no more than four years.

Your plan is individual to you and specifically tailored to your circumstances.

The start date of your plan will be confirmed on the communication we’ve sent you. The amount we request each period will be based on your outstanding balance at the start of your plan.

If you’d like to pay a higher amount than the figure we’ve provided, please feel free to do so! It’ll ensure your Paydown Plan balance is paid off sooner, and you’ll pay less interest overall.

We’ve put together some questions and answers below, to make sure you’re 100% clear on what will happen next.

1. How does this affect my minimum payment?

Your minimum payment will be made up of two parts.

The first part relates to your outstanding balance. You'll be asked to pay a fixed amount each period, to ensure that this balance can be paid off within 4 years and your account does not remain in Persistent Debt.

The second relates to activity on your account after your Paydown Plan starts. If you place any orders or incur any charges on your account after this date, you’ll be required to pay up to 8% of that outstanding balance each period. Please see question 2 for an example of this.

2. What impact will placing further orders have on my minimum payment?

Here’s an example, based on your new spend repayment rate being 8%.

Your individual rate will be confirmed on the communication we recently sent you.

Your outstanding balance is £1,000 and you’ve been given a fixed Paydown Plan amount of £40. This will be your new minimum payment and will be shown clearly on your statement.

If you then place an order for £100, the minimum payment for this new spend will be £8 (as your new spend repayment rate is 8% and 8% of £100 = £8).

To keep things simple, this will be added to your fixed Paydown Plan amount, bringing your total minimum payment to £48.

3. Can I still shop with you?

Of course! As long as it’s affordable, you can continue to shop with us as before, with the reassurance that your current outstanding balance will be completely paid off within 4 years. Remember that any further orders will increase your minimum payment.

If you wish to pay your balance off in less than four years, you can do so by increasing your regular payment or making additional payments. This means you’ll pay less interest overall.

4. What happens to my statement when my Paydown Plan starts?

We want to keep things as simple as possible, so you’ll still only be asked to make one payment each time we send you a statement. The minimum amount requested will consist of your fixed Paydown Plan amount and up to 8% of the balance of any new orders/charges incurred.

5. Do I need to make any changes to how I make my payments?

You can continue to make payments in the same way you do now – but the simplest way to pay is by Direct Debit. You can set this up by clicking here

Note for customers who already have a Direct Debit set up: if your current payment is less than the amount requested by your Paydown Plan, your Direct Debit will be adjusted to reflect your plan.

If you choose to pay by standing order, you’ll need to check that it’s enough to cover your new fixed amount.

6. Will my credit file or credit score be negatively impacted by my account being in Persistent Debt?

If you continue to make the minimum payment requested on your statement, your credit file and credit score will not be affected at all. We’ve put this plan together as part of our duties as a responsible lender; we want to make sure you can pay off your current debt in a reasonable timeframe.

7. What if I can’t afford the new fixed amount?

We appreciate that your new minimum payment may be more than you are used to paying, and that this might make things difficult for you. If you’re worried that you may not be able to pay the proposed fixed amount, or you’re currently struggling to make existing payments, please reach out so that we can help you.

Click here to fill in our online form

If you’re unable to access this form or need to speak to a member of our team, you can contact us by:

- Chat: just click the ‘Need Help’ button. If no one’s available, you can leave us a message.
- Email: [e-mail]
- Phone: [phone] (lines are open Monday-Friday, 9am-5pm)

8. How long will it be before I receive a response?

You can expect to hear from us within 7 days.

Remember: the quickest and easiest way to contact us is via our online form – just click here to fill this in.

9. Where can I get help if I'm worried about my finances?

We work with various organisations who can help support you, including:

• StepChange Debt Charity for free debt advice throughout the UK

Phone: [phone] or visit www.stepchange.org

• PayPlan for free debt advice throughout the UK

Phone: [phone], or visit www.payplan.com