New buy now pay later rules begin today with key changes

The changes, which came into force on 15 July, mean lenders must carry out affordability checks before offering buy now pay later (BNPL) products, provide clearer information about repayments and give customers more support if they get into financial difficulty.

Customers will also be able to take complaints to the Financial Ombudsman Service if they are unhappy with how a regulated provider has handled their agreement.

The FCA said the changes are designed to give consumers greater protection while allowing people to continue using short-term, interest-free credit responsibly.

A spokesperson for the FCA said: “Buy now pay later can be a form of credit, but people deserve to be protected when using it.

“Lenders should check their customers can afford to pay it back.”

The spokesperson said millions of customers will receive clearer information before signing up “and better support if something goes wrong”.

What has changed?

Under the new rules, buy now pay later providers must:

• carry out proportionate affordability checks
• provide clear information about repayments before customers sign up
• explain what happens if payments are missed
• offer support to customers experiencing financial difficulties
• direct people to free debt advice where appropriate
• allow eligible complaints to be referred to the Financial Ombudsman Service

Warning. Overdrafts are the worst form of mainstream debt. The interest rate will shock you…

A snip from the new ‘Debt cost cutting Masterclass: Cards, Loans, Overdrafts, BNPL’ episode of the Martin Lewis Podcast. Listen to it on https://t.co/P4U5KDLzT0, Apple, Spotify & all… pic.twitter.com/4Tkkm0Ssd9

— Martin Lewis (@MartinSLewis) January 9, 2026

The new rules also mean some buy now pay later borrowing may appear on credit reports and could be considered by lenders when people apply for other forms of borrowing.

Could it affect your credit score?

BNPL agreements may now be reported to credit reference agencies.

That means lenders could take them into account when considering applications for loans, credit cards or mortgages.

Dimitar Lazarov, head of Credit Karma UK, said people who repay on time could benefit, but warned those who miss payments should be aware that “it could have an impact on their ability to apply for other products”.

John Webb, head of consumer affairs at Experian UK and Ireland, said consumers should remember that opening a new BNPL account “may be taken into account on credit reports by lenders when they are considering new borrowing applications such as a loan, credit card or mortgage”.

Why were the rules introduced?

Buy now pay later has become increasingly popular because it allows shoppers to spread payments without paying interest.

However, consumer groups have raised concerns that some people have accumulated several BNPL agreements without fully considering whether they could afford the repayments.

According to the FCA, the market was worth more than £13 billion in 2024.

Its Financial Lives Survey found around 10.9 million UK adults used buy now pay later during the year to May 2024.

Sarah Coles, head of personal finance at AJ Bell, said: “Most payments using BNPL are relatively small.

“The Woolard Review, done by the FCA in 2021, showed that people often didn’t think of it as borrowing either.

“A combination of both things means borrowers don’t consider affordability as carefully as they would for other kinds of debt.

“It means a real risk of stacking these debts until they’re unwieldy. The rules requiring stricter affordability checks are highly sensible.”

She added the extra checks “should help people stop and think about whether they really need the item they’re buying”.

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Where can you get help?

If you’re struggling with buy now pay later repayments, experts recommend contacting your provider as soon as possible rather than taking on more borrowing.

Free debt advice is available from organisations including:

• StepChange Debt Charity
• Citizens Advice
• National Debtline
• Christians Against Poverty

Vikki Brownridge, chief executive at StepChange Debt Charity, said: “There’s no doubt that BNPL can be a useful form of credit – especially as it’s usually short-term and interest-free – to spread the cost of a bulky expense.

“However, as with any form of credit, regulation is vital to protect customers if something goes wrong, and ensure people aren’t being offered credit where it’s not affordable – something which will trigger debt problems, as we see all too often.

“Consumers can go on using BNPL in the same way as before, but it’s important to be aware of the new protections.

“If you are finding yourself struggling to keep up with payments, rather than taking on more credit or BNPL agreements, we would always advise seeking free and impartial debt advice to help get back on track.”