Money expert Martin Lewis has announced he is ‘pleased’ after Chancellor Rachel Reeves phoned the Money Saving Expert founder to tell him about a law change the government is planning.
Martin has been campaigning furiously on Buy Now Pay Later payments online, calling for more to be done to regulate the sector, with companies offering instant credit on online purchases of amounts ranging from £10 to £1,000 or more.
Today, Martin announced that Rachel Reeves has now confirmed that the government is bringing in a law change on Buy Now Pay Later schemes but has warned that there will still be some time until it comes into effect.
He said: “NEWS. I was pleased to get a call from @RachelReevesMP today to tell me, they’re bringing in Buy Now Pay Later regulation, here’s my official comment.
“Buy Now, Pay Later is now ubiquitous at online checkouts, so the fact it’s never been regulated is a travesty I and others have long campaigned on. The last Chancellor promised to regulate, then the tumbleweed rolled as he went silent, so I am delighted the new Government has quickly restarted the process.
“BNPL can be useful, allowing those who need to spread payments for a budgeted, necessary purchase like a plumber to do it interest-free.
“Yet it’s been sold as a lifestyle choice, not a debt, and pushed for instinct buys or even takeaways. Too many are in trouble with multiple BNPL repayments, leading to debt-chasing and credit file damage. Regulation will mean firms must be overt that it’s a debt, have proper affordability rules, and will crucially let people go to the ombudsman if things go wrong. Yet it’s not coming in until 2026, so people should still be very wary until then.”
Martin then published another video warning his followers that because the law change won’t come into place until 2026 following the necessary consultations, online shoppers should still be wary now, calling it ‘the fastest growing form of major debt in the UK.”
He warned that there are ‘few’ affordability checks, meaning those who take out BNPL payments can find themselves saddled with debt they can’t repay and which will then affect your credit score ‘potentially stopping you getting a future mortgage‘.