UK overhauls credit card and loan rules for first time in 50 years
Key Points
- The UK government announced on 18 May 2026 the first major overhaul of consumer credit law in over 50 years.
- Reforms will move detailed rules from the Consumer Credit Act 1974 into the Financial Conduct Authority rulebook.
- Consumers using credit cards, loans and overdrafts will receive clearer information about costs and key terms.
- The changes form part of the Financial Services and Markets Bill introduced in the King's Speech.
- The reforms follow the Woolard Review of the unsecured credit market and the FCA's Phase 1 consultation.
Borrowers will see clearer information on credit cards, loans and overdrafts under the first major overhaul of UK consumer credit law in over 50 years.
The Treasury announced on Monday (18 May) that it will move detailed requirements out of the Consumer Credit Act 1974 and into the Financial Conduct Authority rulebook, giving the regulator the ability to update rules as financial products change.
The reforms form part of the Financial Services and Markets Bill introduced in the King’s Speech. Consumer testing will inform the new rules, and the government will keep them under review as products and technology develop.
Parliament first passed the Consumer Credit Act in 1974, and although it has had updates over the decades, many of the core rules predate smartphones, digital banking and the consumer fintech products millions of people now use every day.
Moving the prescriptive requirements into the FCA rulebook means the regulator can adjust communications and disclosure rules without primary legislation each time.
“We are creating a flexible regime fit for the digital age,” said Rachel Blake, Economic Secretary to the Treasury and City Minister. Blake said people need to be able to make informed choices when applying for and using credit, and that the existing Act was written for a different era.
She added that firms will benefit from a more flexible framework that allows them to develop new products and use new technology to serve customers better.
The reforms follow the Woolard Review of the unsecured credit market, which recommended modernisation of the CCA. “The first steps to enable clearer information and new products are welcome ones,” said Chris Woolard, who chaired the review and is now a partner at EY. Trade body UK Finance also backed the changes.
StepChange Debt Charity said clearer information matters most for borrowers who run into difficulty.
“For those struggling with managing credit repayments, it is vital that consumers can make informed choices about products and know how to seek help when it is required,” said Peter Tutton, Director of Policy, Research and Public Affairs at StepChange Debt Charity.
Tutton said moving communication requirements into FCA rules would allow a test and learn approach that reduces harm around debt.
“These reforms are an important step towards a simpler, future-proofed regime with strong consumer protections in an increasingly digital world,” said Eric Leenders, Managing Director of Personal Finance at UK Finance.
