BNPL to come within FCA regulation from summer 2026

Buy now, pay later (BNPL) will come within Financial Conduct Authority regulation beginning from summer 2026, under legislation the Government has already passed¹. The FCA has consulted on its draft rules and guidance for BNPL firms, a process it calls regulation of deferred payment credit, known by public convention as buy now, pay later¹.

StepChange, the debt charity, published its response to that consultation in September 2025¹. It said it campaigned for and welcomed the Government's commitment to regulate the sector, and described BNPL as offering "an accessible form of income smoothing for retail expenses, with fixed repayments on a clear schedule over a short timeframe and is interest-free"¹. It also set out concerns raised by itself and the wider consumer sector: risks of unaffordable lending and the impact of late fees on consumers in difficulty; low consumer understanding of BNPL as a form of credit; product placement and low friction design that encourages consumers to spend more than they mean to; and inconsistent support for borrowers in difficulty¹.

The charity said it was broadly supportive of the FCA's proposed approach but flagged potential ambiguities in how creditworthiness and affordability rules apply to BNPL, and the FCA's proposed approach to post-contractual information¹. It said it is relatively common for consumers to "stack" BNPL loans, and that the FCA's rules look poorly specified for repeat and concurrent lending by individual firms, which it said risks ambiguity leading to unaffordable lending¹.

On communications after a customer falls into arrears, StepChange said the FCA wants firms to tell customers who have missed repayments about sources of free debt advice, and to give that information at the right time in a standardised form, but that it does not think the rules as drafted will deliver those objectives¹. It has called for the FCA to be more prescriptive on the timing and content of post-arrears communications while retaining flexibility for firms to design effective approaches to engaging customers in difficulty¹. It also said it wants the FCA to go further in setting expectations for firms whose products pose higher risks of exploiting behavioural bias, noting that the Consumer Duty requires firms to avoid causing foreseeable harm, including through exploiting consumer behavioural bias or vulnerability¹.

Why it matters for households

BNPL is currently outside FCA regulation, and the change means firms offering it will be subject to FCA rules from summer 2026¹. The consultation covers the rules that will apply to those firms, including how they assess whether lending is affordable and what information customers receive after taking out an agreement and after missing a repayment¹. StepChange's response concerns how those rules will work in practice for people who use BNPL, particularly those who hold several BNPL loans at once or who fall behind on repayments¹. The detail of the final rules, including the exact start date within summer 2026, has not been reported in the material available.

What happens next

The FCA consulted on its draft rules and guidance for BNPL firms, and StepChange's response was published in September 2025¹. Regulation is due to begin from summer 2026¹. The FCA's final rules, and any changes made following consultation, have not been reported in the material available.

For background on how the sector works and what protection exists now, see buy now pay later explained and is buy now pay later regulated by the FCA?. The new regime is set out under deferred payment credit, and the wider framework is covered in financial regulation in the UK.