token payment plan (TPP) stepchange
What Is a ‘Reasonable Period of Time’ When Making Token Payments?
When you’re struggling with debt, one question often pops up: How long can I make token payments?
To keep it short and sweet, there’s no fixed time limit.
That might seem surprising, so let’s take a closer look at what token payments are, what the Financial Conduct Authority (FCA) says about them, and what “reasonable period of time” really means in practice.
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Understanding Token Payments and the FCA’s Guidance
Token payments are small, affordable amounts you offer to your creditors when you can’t meet your regular repayments due to financial hardship. They are usually intended as a temporary measure, but can, in some cases, continue longer depending on your financial circumstances, while helping you manage debts responsibly and protect your essential living costs.
The FCA Handbook sets out guidance on this in CONC 7.3.5 (3), which advises that lenders should consider:
“…accepting token payments for a reasonable period of time in order to allow a customer to recover from an unexpected income shock, from a customer who demonstrates that meeting their existing debts would mean they are unable to meet priority debts or other essential living expenses (such as mortgage, rent, council tax, food, and utilities).”
In plain English, that means creditors must take into account your ability to cover essentials first. If paying the full amount would jeopardise your rent or food bills, token payments are an acceptable, responsible step.
Token Payments are entirely based on what you can afford; it really is that simple.
Is There a Time Limit for Token Payments?
The short answer is no.
There is no legal or regulatory time limit that dictates how long you can keep making token payments. Financial difficulty has no fixed timeline, and the FCA recognises this. As long as your payments reflect what you can truly afford and your creditors are kept informed, there is no expiry date on your plan.
Many people make token payments for several months, and in some cases even years, when their circumstances haven’t improved, and creditors continue to accept the plan, although debt charities usually treat token payments as a short term breathing space solution rather than a long term fix.
"Just Checking In" — Annual Reviews from Creditors
While there’s no time limit, that doesn’t mean your plan stays untouched forever. Creditors will usually review your situation periodically, often around every 12 months, to check whether your circumstances have changed.
This is intended as good practice, not pressure. It’s simply to confirm whether your current circumstances have changed.
You may be asked to complete a new income and expenditure (I&E) form, which you can do using our budget planner. If your finances haven’t improved, you can confirm this in writing and continue with your token payment plan. If your situation has improved, you might discuss adjusting your payments accordingly.
The key here is communication. As long as you’re open about your situation, creditors are expected to treat you fairly under FCA guidance.
Why There’s Flexibility Around “Reasonable Periods”
Unlike other forms of repayment, token payments are based entirely on affordability and recovery, not a set timeline. Every person’s recovery from financial shock, whether that’s redundancy, illness, or cost-of-living pressures, varies.
Research from UK debt charities shows that many people in financial difficulty remain affected for more than 12 months, and some for much longer, depending on their circumstances.
So, it’s not about how long you’ve been on token payments — it’s about whether your payment plan still reflects your current financial reality.
What You Should Do If Your Circumstances Change
If your financial position improves, for example, you start new employment or reduce your expenses, you can increase your monthly payments if it’s genuinely affordable. It’s a good idea to reassess your situation first. Use our budget planner to thoroughly check whether you can truly afford to increase your payments before you commit.
Budget planner.
Do you know how much you have left at the end of each month? Do you need to send an income and expenditure to a creditor? We've got you covered. Our budget planner provides you with a simple and free way to view and track your spending.
However, if your circumstances have not improved, you can confidently continue your token payments and explain that your financial hardship continues. Creditors should not pressure you into payments that are clearly unaffordable and are expected to consider your circumstances under FCA guidance.
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.