It’s been announced that new regulations for the ‘Buy Now, Pay Later’ (BNPL) will come into effect in July 2026, a welcome and overdue move.
The Financial Conduct Authority (FCA) is now consulting on what the regulations will mean for the industry and the people who use this type of credit.
With the growth of BNPL in recent years, it’s clear that stronger consumer protections are urgently needed. This announcement marks a significant step toward creating a fairer, safer credit landscape for all.
BNPL allows customers to split payments into instalments, often interest-free, at the point of purchase.
While the convenience is undeniable, the risks have grown just as fast as the popularity.
With providers like Klarna, Clearpay, and Laybuy expanding into mainstream retail, concerns about rising consumer debt, unclear terms, and lack of affordability checks have mounted.
Until now, BNPL products have been free to operate without the regulations applied to traditional lenders, meaning many consumers have been left unprotected and uninformed.
Under the FCA’s new plans, BNPL firms will be required to conduct proper affordability checks, provide clear information about the risks and terms of borrowing, and handle complaints through the Financial Ombudsman Service.
Marketing practices will also be scrutinised to prevent misleading promotions that encourage reckless spending.
But with regulation still nearly a year away, what can you do in the meantime?
First, treat BNPL as real debt. Just because interest isn’t charged doesn’t mean there are no consequences. Missed payments can incur fees and affect your credit score, depending on the provider.
Second, read the terms. Make sure you understand the repayment schedule, penalties, and what happens if you can’t pay on time. If it’s unclear, don’t click ‘Pay Later’.
Third, budget responsibly. If you couldn’t afford the item without BNPL, ask yourself whether it’s a necessary purchase. Short-term flexibility shouldn’t lead to long-term strain.
Finally, use it sparingly. BNPL can be a helpful tool, but over-reliance can lead to multiple staggered repayments and mounting debt.
If you’re worried about any type of debt, you can speak to charities like National Debtline. Wrekin Housing Group customers can also contact our Money Matters team. Homes Plus customers can also speak to our dedicated team, for confidential money advice. Please be aware that there is currently a waiting list for this support.