The UK's buy now, pay later (BNPL) market has reached an unprecedented value of over £13 billion as of 2024, a rise from just £60 million in 2017. This exponential growth has led to new regulations taking effect on Wednesday, 14 July 2026, aiming to provide enhanced protections for consumers and regulate the sector more closely. The changes address long-standing concerns about unmanageable debt and damaged credit scores among individuals using BNPL services.
BNPL lenders are now required to conduct thorough affordability checks before approving each loan, a significant shift from previous practices. Firms must also supply transparent payment schedules and detailed information on the consequences of missed payments upfront. Crucially, users facing financial difficulties will be directed towards debt advice rather than immediate debt collection.
The introduction of Section 75 protection for BNPL purchases exceeding £100 is another pivotal change for consumers. This safeguard, typically associated with credit cards, allows individuals to claim against both the provider and retailer if issues arise with qualifying purchases between £100 and £30,000. Although the average transaction value is around £60, this protection offers a vital safety net for larger purchases.
Consumers now have access to the Financial Ombudsman Service (FOS) for complaints about BNPL services, including mis-selling or incorrect credit file marks. This move aligns BNPL with other regulated financial products and provides an essential route for resolving disputes.