Buy Now Pay Later now regulated by the FCA, with affordability checks before you buy

Since 15 July 2026, Buy Now Pay Later (BNPL) services, which let shoppers split a purchase into interest-free instalments, have been overseen in the UK by the Financial Conduct Authority (FCA). This is according to a government statement published by HM Treasury on the same day.

What has changed

Until now, many such offers sat outside regulation. They are now subject to rules similar to those for other forms of consumer credit. According to the government, the key changes are:

• Affordability checks. Firms must assess whether a customer can afford to repay before granting credit. The aim is to stop people borrowing more than they can realistically pay back.
• Rights over faulty goods. A customer seeking a refund for faulty goods has the same clear, enforceable rights as with other regulated financial products.
• Help with financial difficulty. People struggling to repay are to be directed first to debt advice, rather than being passed straight to a debt collector.

Economic Secretary to the Treasury Rachel Blake said people using BNPL have until now had fewer rights than those paying by credit card. The government says the checks are meant to be quick and seamless, and that responsible users should not face delays.

Scale of use

A House of Commons Library briefing of 29 July 2026 says BNPL has become one of the most popular forms of credit in the UK. In 2024, around 20% of adults used it. The regulation covers some interest-free agreements, referred to in the legislation as "deferred payment credit". These are payments split into no more than 12 instalments over 12 months.

Possible side effects

In the government's response to the consultation in May 2025, some respondents noted that the new checks could limit access to credit for people outside the risk appetite of mainstream lenders. Younger consumers were among those mentioned. Not every request for deferred payment will therefore be approved.

What this means for you

The rules apply to anyone who buys from UK retailers offering BNPL, including online shops. People living in the UK should be prepared for an instalment payment to be declined at checkout after an affordability check. Customers now have clearer rights if they have a dispute over faulty goods. For those in financial difficulty, the government promises referral to debt advice first. The BBC sets out detailed tips on how to avoid being refused. We could not access that article, so we do not repeat them here.