Cooling-off periods and cancelling financial products

A cooling-off period is a legal window in which you can cancel a financial product you have bought, without giving a reason and without having to justify the decision. For most things arranged online, over the phone or by mail order, that window is 14 days¹. For life insurance, pensions and annuities it is longer: 30 calendar days under the FCA's conduct rules².

The right exists because these products are often bought at a distance, without a face-to-face conversation, and sometimes after pressure or a snap decision. It gives you time to read the terms properly, compare alternatives and back out cleanly. Cancelling in time unwinds the deal: the contract is treated as ended, and in the case of credit agreements the whole arrangement is treated as if it had never existed³.

What a cooling-off period lets you do

A cooling-off period is a right to withdraw, not a complaint or a dispute. You are not saying the firm did anything wrong; you are simply saying you have changed your mind. The legal effect is set out plainly in the FCA's rulebook:

That means the product stops existing from the moment your cancellation takes effect. An insurance policy lapses, an investment is unwound, a savings account is closed and the money returned. What you may have to pay back, and what you get refunded, depends on the product and is covered later on this page.

The right is not a one-off that expires the first time you use a product. Providers can apply it again when a product rolls over. Ford Money, for example, applies a 14-day cooling-off period from the maturity date when a savings account matures into another Ford Money account, so a customer can still request closure of the account as part of their rights⁷. Al Rayan Bank similarly gives a 14-day window each time funds in its Fixed Rate Saver are reinvested for a further term, with the period beginning on the commencement of the new term⁸.

Cooling-off periods also sit alongside your ordinary statutory rights. Cancelling within the window is not the same as rejecting faulty goods or complaining about poor service; those rights are separate and are not used up by a cancellation.

Cooling-off periods by product: 14 or 30 days

The length of the window depends on what you bought and how you bought it. The general rule for services bought at a distance, including online, is 14 days from the day you place your order⁹. The Financial Services (Distance Marketing) Regulations 2004 give consumers 14 days to cancel most services, starting from the date of purchase³. Life and pensions contracts get 30 calendar days².

Two points are worth noticing in that table. First, 14 days is a minimum, not a ceiling: a seller must give you at least that long for a service arranged online, by phone or by mail order, and some firms choose to give more¹. Second, some products pick up their own dedicated rules. Sale and rent back schemes, where you sell your home and rent it back from the buyer, must give you a 14-day window from the time you are supplied with the written pre-offer document, giving you more time to decide what to do¹³. Subscription contracts, under legislation from 2024, carry a right to cancel during an initial cooling-off period and any renewal cooling-off period, and no penalty or charge may be imposed for cancelling during those windows¹⁴.

Pensions, life insurance and annuities: 30 days to cancel

The longest cooling-off period in UK financial services belongs to the products that are hardest to reverse once they are in motion. Under COBS 15.2, a consumer has the right to cancel, within 30 calendar days, a life policy (including a pension annuity), a contract to join a personal pension scheme or stakeholder pension scheme, a pension contract, a pension transfer, and a contract to vary a personal or stakeholder pension scheme by exercising an option to make income withdrawals².

Thirty days rather than fourteen reflects what these products do. A pension transfer moves your retirement savings out of one scheme and into another, sometimes with guaranteed benefits left behind that cannot be recovered. An annuity converts a pot of money into an income for life and generally cannot be undone after it starts. The longer window gives you time to take advice, read the illustrations and check the numbers before the decision becomes permanent.

Insurance in this family gets the same treatment. If you take out income protection insurance, you usually have 30 days to cancel the policy and get a full refund¹⁰. NS&I applies a 30-day window to its Guaranteed Growth Bonds and Guaranteed Income Bonds: if you change your mind after investing, you can cancel within 30 days of receiving confirmation of your Bond¹⁷, and its key features document confirms the same 30 days from confirmation¹⁹.

The 30-day right is not automatic for every pension-related purchase. For lifetime ISAs and certain non-life contracts bought face to face rather than at a distance, the right arises only where the contract followed a personal recommendation or a ready-made suggestion from the firm or another person². More on that distinction in the next section.

ISAs and investment wrappers: one right covers the whole arrangement

ISAs are tax-free savings and investment plans which allow you to save a certain amount of money each year tax free²⁰. Individuals have the right to access their investment at any time and there are no statutory lock-in periods²⁰, so the question of cancelling is usually about unwinding a recent purchase, not about escaping a long-term commitment.

Where a cooling-off right applies to something bought inside a wrapper, the right covers the whole arrangement, not just the piece you might have expected. The FCA's rules state that for a life policy effected when opening or transferring a wrapper, the 30 calendar day right to cancel applies to the entire arrangement². For a unit bought when opening or transferring a wrapper or pension wrapper, the 14 calendar day right to cancel applies to the entire arrangement². A contract for a cash deposit ISA carries a 14 calendar day right¹⁶.

The practical point is that cancelling one holding does not necessarily close the wrapper, and closing the wrapper cancels everything inside it. If you opened an ISA and bought a life policy within it, the 30-day right applies to the whole arrangement; if you bought fund units, the 14-day right does. Which one applies depends on what was bought, so check the contract documents rather than assuming a single rule for all ISAs.

Money held in cash ISAs is also covered by the Financial Services Compensation Scheme alongside current accounts, savings accounts and savings bonds²¹, though that protection is about the provider failing, not about changing your mind. The two things are separate: FSCS cover does not give you a cancellation right, and a cancellation right does not compensate you for a firm's collapse.

Loans and credit agreements: 14 days to withdraw

Credit agreements taken out at a distance carry a 14-day right of withdrawal. In addition to a five-day cooling-off period for agreements signed off trade premises, you have a 14-day period in which to change your mind and cancel a credit agreement⁴. The 2010 regulations that implemented this right state that the consumer has the right to withdraw from a credit agreement within 14 days²³, and the rule on how notice is timed works on despatch rather than receipt: sending your cancellation notice on time determines whether it is timely²⁴.

The effect of cancelling is unusually thorough. The agreement and any linked transactions are treated as if they had never been entered into; the loan company must repay all sums you have paid, and you must return any goods you have received⁴. You do not, however, have an automatic right to return goods bought under a linked credit agreement unless the supplier is willing to take them back²⁴.

The 14-day period starts from the day the agreement is concluded or, if later, from when you receive a copy of the agreement⁴. For credit cards, it starts from when you receive notification of your credit limit⁴.

The older Consumer Credit Act 1974 route still matters for agreements signed away from the lender's premises. Under it, a debtor may serve notice of cancellation between signing the unexecuted agreement and the end of the fifth day following the day on which he received a copy of the agreement or the required notice⁵. In practice that gives five clear days, not counting the date of receipt²².

Not every credit agreement can be cancelled. There are some agreements that cannot be cancelled, for example where the amount of credit exceeds £60,260 and for agreements secured on land⁴. Pawnbroking customers have 14 days to withdraw from the loan agreement¹². More on the gaps in the next section.

Where there is no right to cancel

The cooling-off right has edges, and it is worth knowing where they are before you rely on one.

• Bought in person at the business's premises. If you went into the business's shop or premises to arrange the service, you do not get the cooling-off period¹. The right exists for distance and off-premises sales, not for walk-in purchases.
• The service is already complete. If the service is complete before the cooling-off period ends, you do not have the right to cancel⁹.
• Sealed goods opened. You do not have a right to cancel goods with a seal that has been broken for health protection and hygiene reasons⁹.
• Large or land-secured credit. Agreements where the amount of credit exceeds £60,260, and agreements secured on land, cannot be cancelled under the 14-day right⁴.
• Buy now pay later. Guidance added in July 2026 confirms that regulated deferred payment credit agreements, the form most buy now pay later takes, do not carry the standard right to cancel, because the cancellation rules do not apply to them.
• Exempt contracts. The FCA rulebook maintains a list of exemptions from the right to cancel, last updated on 6 April 2026²⁶.

Two further points about the edges. The 14-day period for goods is the time you have to decide whether to cancel, so a seller cannot insist you must already have returned the goods within that timeframe⁹. And asking for a service to start straight away does not waive your right: unlike the old Distance Selling Regulations, you do not waive your right to cancel a contract within this cooling-off period even if you asked for the service to begin immediately⁹, though you could be charged for the service you have already had the benefit of.

If you were pressured or misled into a contract rather than simply changing your mind, a different remedy may apply: the right to unwind a contract after misleading or aggressive selling.

When the clock starts and what firms must tell you

Getting the start date right is where most cancellations go wrong, because the clock does not always begin when you might expect.

For financial services under the FCA's rules, the cancellation period begins either from the day of the conclusion of the contract, except for contracts relating to life policies where the time limit begins from the time the consumer is informed that the contract has been concluded, or from the day the consumer receives the contractual terms and conditions and any other required pre-contractual information, if that is later². So if the documents arrive a week after you signed up, the window may run from the later date.

For general consumer services, your cooling-off period begins the day after you enter a contract with the business, whether the contract is written down or not¹. For building work, the 14 days start when you tell the trader you would like them to do the work or sign a written contract²⁷. For credit cards, the 14-day period starts from when you receive notification of your credit limit²². And where a savings product rolls over, the clock can start again: Al Rayan Bank's reinvestment window begins on the commencement of the new term⁸.

Firms must actively tell you about all this. Under COBS 15.2, the firm must disclose, in good time before or, if that is not possible, immediately after the consumer is bound by the contract, and in a durable medium, the existence of the right to cancel or withdraw, its duration, the conditions for exercising it, the amount the consumer may be required to pay, the consequences of not exercising it, and practical instructions including the address to which the notification of cancellation should be sent². For general insurance, a firm must provide a consumer with information on the right to cancel a policy covering the same ground: existence, duration, conditions, amount payable if exercised, consequences of not exercising it and practical instructions²⁸. Cancellation rights do not reduce what else a firm must tell you to enable an informed purchasing decision²⁸.

How to cancel: notice, deadlines and no reason needed

Cancelling is deliberately simple. You do not need to give a reason, and you do not need the firm's agreement.

1. Check which period applies to your product: 14 or 30 days, and from which start date².
2. Find the address. The firm must have told you, in a durable medium, the address to which the notification of cancellation should be sent².
3. Send notice. To cancel the contract in the cooling-off period, write to or email the business to let them know you want to cancel the purchase²⁹.
4. Keep proof of sending. For credit agreements, it is the despatch of the notice, not its receipt, that determines whether the cancellation is in time²⁴.
5. Settle up. Repay any credit drawn down plus accrued interest, and return any goods received⁴.

Some firms make it easier still. Gatehouse Bank states that within its 14-calendar-day cooling-off period for its fixed term deposit, no notice period or charges will apply³⁰. Authorised claims management companies must offer a 14-day cooling-off period when you can cancel your contract without being charged, alongside duties to give clear written information about the service and fees before the contract, get your signature before taking money or starting a claim, tell you about ombudsman schemes and explain how to complain³¹. Subscription contracts go furthest: a consumer has the right to cancel during the initial cooling-off period and any renewal cooling-off period, in any circumstances and without conditions, and no penalty or charge may be imposed for doing so¹⁴.

If your mental health affected the decision, the same cancellation routes apply: writing to or emailing the business within the window is the mechanism, and support is available from Mental Health and Money Advice on returning things bought when unwell²⁹.

Refunds and repayments after you cancel

What comes back to you, and what you owe, depends on the product.

For services, if you paid up front or made a deposit and cancel in the cooling-off period, you are entitled to receive all of the money back, unless you asked for the service to be provided during the period and it was¹. If you cancel a service that has already started, you could be charged for the service you have had the benefit of⁹.

For credit, the position is two-sided. The agreement and any linked transactions are treated as if they had never been entered into, and the lender must repay all sums you have paid, but you have to repay the amount borrowed along with any interest that has accrued up to the point at which you cancel⁴. You must also return any goods you have received⁴.

For investments and insurance, refunds are generally full within the window, but check the small print on advice fees. Where a firm offers to facilitate payment of adviser charges or consultancy charges, it must disclose whether any refund will include an adviser charge, and that you may be liable to pay any outstanding adviser or consultancy charges². The refund of the product and the refund of the advice are separate questions.

Insurance cancellation fees are a live issue even inside the window. If you decide you no longer want your car insurance policy, even within the 14-day cooling-off period, your insurer may charge you a fee³². Which? has documented insurers charging, for example, £25 for cancelling during the 14-day cooling-off period³³. A fee for administration is different from a penalty for exercising the right, and the firm must have told you the amount payable if you cancelled before you were bound².

For savings bonds, NS&I's Guaranteed Growth Bonds and Guaranteed Income Bonds allow cancellation within 30 days of receiving confirmation of your Bond¹⁷, with the key features document confirming the same window¹⁹.

If a firm did not tell you about your right to cancel

The disclosure duties are not optional. A firm must tell you, in a durable medium and at the right time, that the right exists, how long it lasts, what it costs to use and where to send notice². If it did not, that is a compliance failure on the firm's side, and it is the starting point for a complaint.

1. Complain to the firm first, setting out that you were not told about your right to cancel and what you want done. Which? publishes a template letter for complaining that you could not cancel an online order³⁴.
2. Escalate to the Financial Ombudsman Service if the firm does not resolve it. The ombudsman can look at whether the firm met its disclosure obligations and can award redress. See taking a complaint to the ombudsman for the process and time limits.
3. Consider other routes if the matter is wider than one firm, including alternative dispute resolution and, where money is genuinely owed, the small claims court.

If the reason you signed up was pressure or misrepresentation rather than a simple change of mind, the remedy for misleading and aggressive selling, which can unwind the contract entirely, may be stronger than a cooling-off claim. And if the "firm" that contacted you was not a real firm at all, what you are dealing with is a scam, not a contract; scams and fraud covers how to spot one and what to do. Free, impartial help is available from Citizens Advice on consumer problems and from the ombudsman on financial ones.