FCA blogs on evolution of consumer credit

Alison Waters, director of consumer finance at the FCA, has looked at what the next decade holds for consumer credit. She noted the 2024 Financial Lives survey which found that 84% of UK adults had at least one credit or loan product over the past 12 months, and for many it is a lifeline, with significant numbers of people having persistent debt, overdrafts or generally needed credit to meet everyday expenses.

The FCA has worked to show consumers that credit is not always the answer, and to help firms identify borrowers in difficulty at an early stage. Now that it feels it has, in the 11 years since it took over consumer credit regulation, successfully raised standards, it is now working towards a better outlook – by which it means:

• encouraging innovation that adds real value;
• ensuring vulnerable customers get compassionate support; and
• getting the balance right for consumers to get access to credit but also protection through affordable services.