BNPL regulation rules come into force

Rules regulating buy-now-pay-later credit came into force in July 2026, according to a House of Commons Library briefing on consumer credit¹. Parliament had approved plans to regulate previously unregulated buy-now-pay-later credit in July 2025¹. The briefing describes buy-now-pay-later as having "fast become one of the most popular forms of credit in the UK", held by around 20% of adults in 2024¹.

The rules sit alongside a wider overhaul of consumer credit law. In May 2026 the government announced it would repeal much of the Consumer Credit Act 1974 (CCA), with some provisions to be recast in rules set by the Financial Conduct Authority (FCA)¹. The government said the CCA is:

The briefing also records the government's view that the CCA is "inflexible in that the requirements can be a barrier to companies providing innovative new services", and "complex in that conduct requirements for credit providers are spread between the act and the Financial Conduct Authority (FCA) Handbook"¹. The government's policy is that the FCA, not Parliament, should be responsible for setting rules governing the sector, as far as is practical¹.

The briefing notes a countervailing view. The FCA has said that some of the protections in the CCA which the government plans to repeal are significant and that it would not be able to sufficiently replicate these protections¹. The briefing points to the motor finance mis-selling scandal as an illustration of the importance of those protections: in August 2025 the Supreme Court judged that certain commissions paid to car dealers by lenders, and passed on to borrowers, could be unfair under the CCA¹. Partly as a result, the FCA has launched a redress scheme for borrowers, which it estimates will cost lenders £9.1 billion, comprising £7.5 billion in redress and £1.6 billion to run the scheme¹.

Why it matters for households

Buy-now-pay-later credit was previously unregulated, and the rules that came into force in July 2026 change the framework that applies to it¹. Around 20% of adults held buy-now-pay-later credit in 2024, so the change affects a large share of households that use deferred payment at the checkout¹. Separately, the planned repeal of much of the CCA would move a set of consumer credit protections from statute into FCA rules, and the FCA has said it would not be able to sufficiently replicate some of the protections being repealed¹. The motor finance redress scheme, estimated by the FCA at £9.1 billion for lenders, concerns commissions on car dealer finance judged potentially unfair under the CCA¹.

What happens next

The briefing does not set out a timetable for the repeal of the CCA beyond the May 2026 announcement, and no commencement date for the recast FCA rules has been reported¹. The FCA's motor finance redress scheme is described as launched, with the £9.1 billion cost estimate given by the FCA¹.