FCA publishes PS24/2 confirming final rules to strengthen protections for borrowers in financial difficulty

The Financial Conduct Authority (FCA) published PS24/2 on 10 April 2024, confirming final rules to strengthen protections for borrowers in financial difficulty¹. The rules incorporate relevant aspects of the regulator's Tailored Support Guidance (TSG) for consumer credit, mortgages and overdrafts into its Handbook, alongside further targeted changes¹. The TSG will be withdrawn when the rules come into force on 4 November 2024¹.

The FCA consulted on the proposals in CP23/13, which opened on 25/05/2023 and closed on 13/07/2023¹. The policy statement summarises and responds to the feedback received¹. The FCA said the changes build on the TSG, introduced during the pandemic, which set out how firms could support customers in financial difficulty, and noted that consumers have since faced increased financial challenges due to the rising cost of living¹.

The FCA said the policy statement will primarily affect a defined set of firms¹:

Alongside the Handbook changes, the FCA updated its non-Handbook guidance FG23/2 to reflect the changes¹. The updated FG24/2 will replace FG23/2 with effect from 4 November 2024¹.

Why it matters for households

The rules apply to firms including consumer credit lenders, mortgage lenders and administrators, and premium finance firms, among others¹. For borrowers dealing with those firms, the practical effect is that standards previously set out in the TSG, which the FCA describes as making clear how firms could support customers in financial difficulty, become part of the Handbook from 4 November 2024, when the TSG is withdrawn¹. The FCA has not set out in this policy statement the specific rule-by-rule differences that borrowers will notice, and it has not reported new figures on how many customers are expected to be affected.

The changes sit within the wider framework of financial regulation in the UK and the consumer protection rules that apply to firms. The FCA has not reported in this document whether the rules change the availability of any particular forbearance measure, nor any effect on credit files or arrears reporting.

What happens next

The rules come into force on 4 November 2024, and the FCA will withdraw the TSG at the same time¹. The updated FG24/2 replaces FG23/2 from the same date¹.