Buy now, pay later consumers will now face affordability assessments and will receive necessary assistance if issues arise under enhanced safeguards set to take effect in July.

Starting July 15, 2026, the buy now, pay later industry will be subject to oversight by the Financial Conduct Authority (FCA). Individuals using buy now, pay later services will need to be provided with transparent and upfront information about their agreements, detailing payment schedules, amounts due, and repercussions for missed payments.

In addition, buy now, pay later lenders will be required to conduct assessments to ensure that customers have the financial capacity to repay their borrowings. Adequate support will also be made available to customers facing financial challenges, including guidance on accessing free debt advice services.

Users of buy now, pay later platforms will have the option to lodge complaints with the Financial Ombudsman Service (FOS) if they believe they have been treated unfairly. Lenders must secure authorization from the regulatory body and adhere to Consumer Duty regulations, which establish heightened consumer protection standards within the UK financial sector.

Firms will be granted a six-month window from the implementation date to apply for full authorization. While buy now, pay later options offer a means to spread payment obligations, the sector has faced criticism in the past for potentially exposing individuals to unmanageable debt.

According to the FCA, the buy now, pay later market expanded to £13 billion in 2024, with 10.9 million adults utilizing such services in the preceding 12 months. Sarah Pritchard, the FCA’s deputy chief executive, emphasized the importance of responsible lending practices to prevent exacerbating individuals’ financial difficulties.

Peter Tutton, director at StepChange Debt Charity, highlighted the benefits of buy now, pay later while cautioning about the associated risks. He emphasized the necessity of the new regulations in safeguarding consumers through affordability checks, ongoing support, and access to redress mechanisms in case of issues.

Moving forward, consumers are urged to verify the affordability of repayments before committing to buy now, pay later agreements. For those experiencing repayment challenges, impartial debt advice services, such as those offered by charities like StepChange, are available for assistance.