Incoming regulations designed to help control ‘buy now pay later’ credit offerings have been welcomed – but shoppers will remain vulnerable until Christmas 2026
Millions of families across the UK have been warned by Martin Lewis over the dangers of ‘buy now pay later’ (BNPL) deals as Christmas approaches.
Despite welcoming incoming regulations aimed at controlling the practice, the MoneySavingExpert founder noted that they won’t be implemented until January 2026. This means shoppers won’t be protected either this Christmas or the next under consumer standards already in place for other financial transactions.
The new rules will address affordability and standard fairness practices, putting an end to the “completely unregulated Wild West” currently characterising BNPL, according to Martin. A free financial ombudsman may mediate in disputes between buyers and sellers but the money guru urged: “It’s important to understand with Christmas coming up and people use buy now pay later a lot, this Christmas and frankly next Christmas you still won’t be regulated.”
“So, be very wary before using buy now pay later at the moment. It can work well for some. But it is unregulated, you do not have the standard consumer protections and this thing called the consumer duty which basically means firms have to treat you fairly.”
Martin initially spoke up when testifying to the Commons Treasury committee in 2020 about the “explosive” growth in BNPL, which even includes people using it to purchase takeaway meals, leaving some individuals unable to repay their debts, reported the Evening Standard. He called on Chancellor Rachel Reeves to tackle the issue. “I was over the moon when the Chancellor rang me yesterday to say ‘we are doing it’,” he said on Good Morning Britain.
He went on: “Buy now pay later is very tempting. You have to question what will change in the next three months that will allow me to maintain my current lifestyle, but also make repayments for all these different purchases. What will change to make it affordable? If the answer is nothing, then don’t do it.”
And with Christmas only a few weeks away, he stressed: “Plunging yourself into debt for Christmas will result in a miserable New Year. It’s one day, ask the Archbishop of Canterbury, he would be heartbroken to know that people were jeopardising their financial stability and risking their well-being and sleepless nights because they overspent at Christmas.”
Companies will also need to provide clear, simple and accessible information about loan agreements beforehand so that consumers can make fully informed decisions and understand the risks associated with late repayments. Michael Saadat, international head of public policy at provider Clearpay stated: “We have always advocated for appropriate regulation that prioritises customer protection, fosters much-needed innovation in consumer credit and sets high industry standards across the board.”
