Buy Now, Pay Later (BNPL) services like Klarna and Clearpay have boomed, hitting £13 billion in 2024. But from 15 July 2026, new FCA rules mean even micro‑loans under £50 will face affordability checks, stronger consumer complaints rights, and enhanced protections; bringing BNPL in line with mainstream credit. Here’s what that means for UK shoppers, and how PennyPlan can help you steer through the changes confidently.
Table of Contents
- What Are Buy Now, Pay Later Services?
- What’s Changing: New BNPL Rules Coming In 2026
- Why This Matters for Consumers
- How to Stay On Top Of BNPL Payments: PennyPlan’s Advice
- The BNPL Landscape: Who’s Involved And What’s Changing
What Are Buy Now, Pay Later Services?
Buy Now, Pay Later (BNPL) lets you spread the cost of shopping over a few weeks or months, often without paying interest at the start. It’s offered by popular providers like Klarna, Clearpay, and PayPal, and is now available at thousands of UK retailers online and in store.
BNPL can feel like an easy way to manage your budget. But if you’re not careful, the payments can stack up fast, especially if you’re using more than one provider at the same time.
Recent figures show over 10.9 million people in the UK used BNPL in the year to May 2024. More than 1 in 5 now owe over £500 in BNPL debt.
Because payments are often taken automatically and many services don’t carry out full credit checks, it’s easy to borrow more than you can realistically manage. Until now, BNPL has also operated outside traditional credit rules, with limited protection if something goes wrong.
That’s exactly why regulation is on the way.
What’s Changing: New BNPL Rules Coming In 2026
From 15 July 2026, Buy Now, Pay Later services in the UK will be formally regulated by the Financial Conduct Authority (FCA). This is a major shift designed to improve consumer protection and bring BNPL in line with other types of credit.
Here’s what the new rules include:
- Affordability checks for every loan
Lenders will need to assess whether you can realistically afford to repay the BNPL loan; even for small purchases under £50. - FCA regulation and oversight
BNPL firms must apply for authorisation from the FCA. They’ll be monitored for fair practices, transparency, and responsible lending. - Stronger consumer rights
You’ll be able to take complaints to the Financial Ombudsman Service. - Section 75-style protection
BNPL users will have clearer processes for refunds and chargebacks, like credit cards. - Clearer information before checkout
Lenders must explain risks upfront, including consequences for missed payments, interest charges, and credit impact.
These rules aim to give shoppers more confidence and clarity, without removing access to flexible payment options.
Why This Matters for Consumers
For many shoppers, Buy Now, Pay Later feels like a convenient way to spread the cost. But without proper checks in place, it’s easy to slip into a cycle of borrowing that becomes harder to manage over time.
The new rules are designed to protect you from that.
- Better visibility of what you’re signing up for
The updated rules will make terms clearer so you know exactly what you’re agreeing to before you click “Pay later”. - More protection if something goes wrong
You’ll have stronger rights for refunds and complaints via the Financial Ombudsman Service. - Help stopping debt from piling up
Affordability checks act as a safety net by assessing your ability to repay beforehand. - A more responsible BNPL market overall
Providers will need to offer fairer terms and clearer choices, reducing debt risk.
At PennyPlan, we believe flexible finance should never come at the cost of your peace of mind. These new rules are a step in the right direction; giving you more control, more clarity, and more support when you need it.
How to Stay On Top Of BNPL Payments: PennyPlan’s Advice
New rules are coming, but the best protection starts with staying informed. At PennyPlan, we help people every day who are struggling with Buy Now, Pay Later debts and we know how quickly things can spiral.
Here are five simple steps you can take now to stay in control:
- Review your current BNPL commitments
Track all open payment plans, amounts owed, and due dates. Use a budget tracker or spreadsheet. - Try to stick to one BNPL provider at a time
It’s easier to manage payments when you’re only dealing with one lender. - Understand the consequences of missed payments
Missed payments can lead to fees, account freezes, and even harm your credit score. - Don’t rely on BNPL for essentials
If you’re using it for food, fuel or bills, consider seeking support from a financial advisor. - Use PennyPlan to explore your options
We offer free, confidential support to help you understand your debt and create a workable plan.
The BNPL Landscape: Who’s Involved And What’s Changing
Buy Now, Pay Later isn’t just a trend; it’s now a key part of how millions of people shop. But as it grows, so does the need for better oversight.
Major providers in the UK
- Klarna – known for “Pay in 3” and interest-free options
- Clearpay – offers fortnightly instalments, mainly for retail
- Laybuy – allows payments over 6 weeks
- PayPal Credit – often includes interest after a set period
Most of these providers are already making changes in line with upcoming rules, such as introducing affordability checks and clearer checkout information.
Who’s using BNPL the most?
BNPL use is especially high among younger adults. Research from the FCA shows that 25–34-year-olds are the most likely to use BNPL regularly. Usage is also rising in more financially stretched households where flexible payments can seem like the only option.
BNPL isn’t just for fashion anymore
What started with clothing and cosmetics has now extended to electronics, furniture, holidays and even groceries. Some people are using BNPL to cover essentials, which is a growing concern for regulators and debt support organisations.
Why this matters now
As the market expands, the risk of hidden debt grows with it. That’s why the FCA’s move to regulate is so important. It helps ensure providers are acting responsibly and giving people a clearer picture of their borrowing.
Worried about BNPL debts?
If your Buy Now, Pay Later payments are starting to build up, you’re not alone and you don’t have to figure it out on your own.
PennyPlan offers free, confidential help to make sense of what you owe and find a way forward that works for you. Whether it’s Klarna, Clearpay or another BNPL provider, we’re here to support you.
