BNPL Dangers UK: FCA’s 2026 Crackdown & How to Stay Safe
BNPL in 2026: The FCA’s New Rules to Protect Your Wallet (And How to Avoid Hidden Traps)
It's tempting to opt for the "Pay in 3, 0% Interest" option at checkout, especially when you're short on cash or something you want is just out of reach. But here’s the thing: Buy Now Pay Later (BNPL) can seem like a lifeline when money's tight, but it can quickly become a slippery slope if you’re not careful.
Ever used Klarna, Clearpay, or Laybuy? Here's what you need to know about the 2026 FCA crackdown and how to protect your finances today.
Why BNPL Feels Like a Trap (Even When It’s “Interest-Free”)
BNPL might seem like a quick fix or a handy shortcut when you want to spread the cost. But the facts are clear:
- 1 in 4 UK users faced late fees in 2023.
- 34% of under-34s missed payments last year and were pursued by debt collectors.
- 63% of millennials use BNPL, often for essentials such as groceries or bills.
It’s easy to understand why: dividing a £200 coat into four payments seems manageable. But juggling 10 BNPL plans? That’s £500 due next month, and most providers don’t give you a heads-up.
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The FCA’s 2026 Rulebook: What’s Changing
Starting from mid-2026, the FCA is putting an end to the BNPL “wild west” with:
Affordability Checks
Providers must assess your income, debts, and spending before approving loans. No more £1,000 debt for someone earning £1,500 per month.
Section 75 Protection
Purchased a faulty laptop? BNPL firms will be jointly liable for refunds on purchases exceeding £100 (just like credit cards).
Right to Complain
If a provider makes a mistake, you can take them to the Financial Ombudsman.
No More Sneaky Fees
Lenders must clearly explain late fees; there should be no more unexpected £12 charges for missing a £20 payment.
The Hidden Dangers the FCA Is Tackling
Debt Spiral Roulette
BNPL doesn’t appear on credit reports...until you miss a payment. Suddenly, that “harmless” £50 loan takes a toll on your credit score, making it tougher to get mortgages or car loans.
The “Invisible Debt” Problem
With 42% of Brits using BNPL, it’s easy to forget payments. One user told Citizens Advice they had 12 active BNPL plans and no idea how much they owed.
Essentials on Credit
11% of users now depend on BNPL for groceries or energy bills. When essentials turn into debts, it’s a recipe for disaster.
The Young & Vulnerable
56% of Gen Z use BNPL, often for fashion or tech purchases. However, 34% of under-35s face late fees, a quick route to financial stress.
How to Use BNPL Safely Until 2026
Before we dive in, just to be clear: we always encourage you to spend only what you have, not what you don’t, in the majority of cases. Relying on credit is rarely the answer. If you’re considering BNPL, here’s how to avoid the worst pitfalls:
- Treat It Like a Credit Card
Only use BNPL for one purchase at a time, and budget repayments like a monthly bill.
- Set Payment Alerts
Set calendar reminders or app notifications, as missed payments can damage your credit score.
- Avoid Essentials
Don't use BNPL for groceries, rent, or bills. If you’re struggling, get in touch with us – we’re here to help you discuss your options and find a better solution.
- Check Your Rights
Since 2022, some buy now, pay later (BNPL) providers, including Klarna, have been reporting borrowing data to UK credit reference agencies. Apple Pay Later loans have also begun appearing on Experian credit reports as of March 2024. As a result, more industry reporting is expected to follow. This makes it easier for you to keep track of your usage.
Don't forget to read The Real Debt Guy's final thoughts below!
The Real Debt Guy is a qualified financial adviser and a UK debt expert. The information in this article is considered to be true and correct at the publication date.
