In a welcome move for millions of UK shoppers, the government has confirmed that Buy Now, Pay Later (BNPL) services will come under Financial Conduct Authority (FCA) regulation by mid-2026.
When we previously explored the risks posed by unregulated BNPL products, we joined calls for stronger oversight to protect consumers from hidden fees, mounting debt, and a lack of transparency. The previous government unveiled plans to tackle this issue back in 2023, and now the current government has responded, signalling an end to what many have called the “wild west” of short-term credit.
What is BNPL?
Buy Now, Pay Later (BNPL) services let shoppers split payments for purchases into smaller, interest-free instalments. Providers such as Klarna and Clearpay have made BNPL a go-to payment method, especially for online shopping.
Why BNPL regulation matters
BNPL services have surged in popularity for their convenience and interest-free structure. According to the BBC, 11 million people in the UK are estimated to have used it in the last year.
But as we noted in our earlier blog, this ease of access came with significant risks:
- No affordability checks meant users could quickly overextend themselves – with many borrowing far more than they could afford
- Many people are unaware of hidden fees or penalties for missed payments.
- The stacking of multiple BNPL agreements made it easy to lose track – and fall into spiralling debt.
A Citizens Advice report we cited found nearly six million people didn’t fully understand what they were signing up for. Regulation was clearly overdue.
What will the new BNPL rules do?
From 2026, BNPL providers will be required to:
- Conduct upfront mandatory credit checks to assess affordability.
- Provide clear and upfront terms, including around fees and interest.
- Offer faster access to refunds.
- Let consumers escalate complaints to the Financial Ombudsman Service.
These changes will finally bring BNPL products in line with traditional credit, closing a major regulatory loophole and giving consumers protections they should have had all along.
Several of the major BNPL providers have welcomed the new regulations.
Why been we’ve calling for this
In our previous coverage, we joined others urging caution for shoppers and pushing for precisely these kinds of reforms. We welcomed Martin Lewis’s call for stronger oversight and offered practical tips to avoid debt traps. Now, it’s gratifying to see that momentum translate into concrete policy and a fairer playing field for consumers.
What this means for you
You’ll soon be better protected from financial harm. Clearer terms and affordability checks mean fewer surprises, and more control over your spending.
In the meantime, if you’re using BNPL, continue to follow these tips:
- Budget wisely and avoid impulse spending.
- Track your BNPL agreements carefully.
- Read the small print before agreeing to anything.
- Prioritise repayments to avoid fees and credit score damage.
After years of unchecked growth, the changes to the BNPL market will protect millions from harm. It’s a move that is both necessary and overdue. Stay tuned as the details emerge. And as always, we’ll be here to help you navigate the changes.
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