UK Consumer Credit License in 2026: FCA Complete Guide
A 2026 deep dive into UK consumer credit authorisation: FCA regulation since 2014, full vs limited permission, Consumer Duty, BNPL / Deferred Payment Credit from 15 July 2026, and the Consumer Credit Act 1974 reform.
UK consumer credit regulation in one page
Consumer credit regulation transferred from the Office of Fair Trading (OFT) to the Financial Conduct Authority (FCA) on 1 April 2014. The Consumer Credit Act 1974 (CCA) remains in force but the licensing and conduct framework sits under the Financial Services and Markets Act 2000 (FSMA). Running a consumer-credit business in the UK requires FCA authorisation.
Covered activities include consumer lending, credit brokering, debt collection, debt adjusting, debt counselling and operating an electronic system for lending (peer-to-peer platforms). The FCA distinguishes between full permission and limited permission based on risk.
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Request demoFull vs limited permission
- Full permission. Consumer lending under a regulated credit agreement, credit brokering for non-ancillary credit, debt collection, debt management. Heavier file, broader SYSC and conduct rules, SMCR applies.
- Limited permission. Firms whose consumer credit activities are ancillary to a non-credit business (e.g. a retailer offering in-store credit for its own products through a third-party lender). Lighter application, reduced fees, still covered by Consumer Duty.
Most fintech consumer lenders need full permission. Retailers offering split-over-instalments on their own products may qualify for limited permission.
Buy Now Pay Later and Deferred Payment Credit from 15 July 2026
The biggest 2026 change is the regulation of Buy Now Pay Later (BNPL) and other Deferred Payment Credit (DPC) agreements. From 15 July 2026, agreements that finance goods or services provided by someone else are regulated DPC, requiring full FCA authorisation.
The change captures:
- BNPL providers currently relying on the CCA Article 60F(2) exemption.
- "Pay in 3" and "Pay in 4" products offered by retailers and third-party providers.
- Zero-interest instalment products financing goods at the point of sale.
BNPL providers must apply for FCA authorisation ahead of 15 July 2026 and implement Consumer Duty and creditworthiness assessment obligations from day one.
Authorisation process and statutory targets
- Pre-application. Recommended for novel lending models. FCA Innovation Pathways for credit innovations.
- FCA Connect submission. Business plan, regulatory business plan, affordability framework, financial projections, governance, compliance and fit-and-proper files.
- Statutory clock. 6 months complete, 12 months incomplete.
- FCA 2026 targets. 4 months complete, 10 months incomplete.
- Real timeline. Limited permission: 3-6 months. Full permission: 6-12 months.
Conduct expectations: Consumer Duty and affordability
- Consumer Duty. In force since 31 July 2023. Four outcomes framework (products, price, consumer understanding, consumer support). Applies to all retail consumer credit.
- Creditworthiness and affordability. CONC 5 rules in the FCA Handbook; tightened expectations on data sources and affordability testing post-2022.
- Financial promotions (Section 21 FSMA). Financial promotions of consumer credit must be approved by an authorised firm or be exempt.
- Vulnerable customers. FG21/1 guidance on fair treatment of vulnerable customers.
- Debt collection. CONC 7 rules on arrears, default and recovery.
Ship a UK consumer credit product with Crassula
Crassula provides the consumer-credit operational core: origination flow, affordability and creditworthiness assessment, KYC and AML, loan servicing, arrears and collections, Consumer Duty MI, and FCA-ready reporting. Supports traditional lending, BNPL/DPC, credit brokering and peer-to-peer platforms.
FAQ
The FCA since 1 April 2014, when responsibility transferred from the OFT. The Consumer Credit Act 1974 remains in force but licensing sits under FSMA 2000.
Full permission covers primary consumer lending, credit broking, debt collection and debt management. Limited permission is for firms whose credit activities are ancillary to a non-credit business (retailers, for example).
BNPL and other Deferred Payment Credit become regulated. Firms offering "pay in 3", "pay in 4" and zero-interest point-of-sale instalment products must hold FCA authorisation and comply with Consumer Duty and affordability rules.
Limited permission: 3 to 6 months. Full permission: 6 to 12 months. FCA 2026 targets: 4 months complete, 10 months incomplete.
Crassula provides the consumer-credit core: origination, affordability/creditworthiness, KYC/AML, loan servicing, arrears/collections, Consumer Duty MI and FCA-ready reporting.
