Over 10 million people who use Buy-Now, Pay-Later (BNPL) products
will gain stronger rights and clearer protections under new rules
- stopping unaffordable borrowing and helping families keep more
of their money.
From next year, BNPL firms will need to follow consistent
standards — so shoppers will know exactly what they're signing up
to when they opt to break up payments, whether they can afford
it, and how to get help when things go wrong.
That means upfront checks to make sure people can repay what they
borrow, fairer and faster access to refunds, and the right to
complain to the Financial Ombudsman — bringing BNPL in line with
other credit products.
BNPL is a useful tool when used responsibly to help people manage
their finances and has grown rapidly with an extra 2 million
people using the product since 2022.
The changes will boost consumer confidence while giving firms the
certainty they need to innovate, grow and invest — delivering on
the government's Plan for Change to grow the economy, unlock
investment, create jobs and put more money into people's
pockets.
, Economic Secretary to the
Treasury, said:
Buy-Now, Pay-Later has transformed shopping for millions, but for
too long has operated as a wild west - leaving consumers exposed.
These new rules will protect shoppers from debt traps and give
the sector the certainty it needs to invest, grow, and create
jobs through our Plan for Change.
The announcement is backed by brand new reforms to the Consumer
Credit Act — which will replace a 50-year-old regime with a
modern, pro-growth framework that reflects how people borrow
today.
Outdated and confusing rules will be removed, with oversight
shifting to the FCA's more flexible system — cutting unnecessary
burdens on business while strengthening protections for
consumers.
Further information
- The government is today publishing the response to the
consultation on BNPL first announced in October 2024 and has
confirmed that the legislation bringing BNPL into regulation will
be laid in Parliament on 19 May.
