Buy now pay later UK: the new 2026 rules, and when to avoid it

How buy now pay later works

At checkout you pick a BNPL option, often from Klarna, Clearpay or PayPal. Common versions are:

• Pay in 3 or pay in 4: the cost split into equal payments over a few weeks
• Pay in 30 days: you get the item now and pay the full amount later

These short, interest-free plans are what the FCA calls deferred payment credit. Longer plans that charge interest are normal consumer credit and have always been regulated.

What changed on 15 July 2026

From 15 July 2026, interest-free BNPL from a lender that is separate from the shop came under FCA rules. For plans taken out from that date:

• Affordability checks. The lender must check you can afford to repay.
• Clear information first. You must be told how much you are borrowing, when each payment is due and what any late fee is.
• Help if you miss a payment. The lender has to contact you, explain what happens next and support you if you are struggling.
• The Financial Ombudsman. If a complaint is not sorted out, you can take it to the Financial Ombudsman Service for free.
• Section 75. If something you bought goes wrong, you may be able to claim a refund from the lender, as you can with a credit card.

Plans taken out before 15 July 2026 are not covered. BNPL offered by the shop itself, rather than a separate lender, is not covered either.

Source: FCA: Buy now pay later.

Does BNPL affect your credit score?

It can. Many providers share data with the credit reference agencies, so plans and missed payments can appear on your report. Lenders, including mortgage lenders, may also see BNPL transactions on your bank statements and ask about them.

Read how to improve your credit score.

When BNPL makes sense

• You already have the money but want to spread a one-off cost, like a winter coat, and you will pay on time
• You want to check an item before paying for it, using pay in 30 days

When to avoid it

• You are using it for everyday spending like food or bills
• You have several plans running at once and have lost track of the total
• You need it because you would otherwise go overdrawn
• It is tempting you into buying things you would not otherwise buy

If BNPL payments are squeezing your budget, list every plan alongside your other debts and see the step-by-step plan to pay off debt.

Common questions

What happens if I miss a BNPL payment?

You may be charged a late fee, and the provider may stop you using it until you catch up. It can be reported to the credit reference agencies. Contact the provider before the payment is due if you know you cannot make it.

Is Klarna regulated in the UK?

Klarna's interest-free plans from 15 July 2026 are covered by the FCA rules, as are other separate BNPL lenders. Lenders must be authorised by the FCA or in its temporary permissions regime to offer them.

Can I get a mortgage if I use buy now pay later?

Yes, but lenders look at your bank statements and credit report. Several BNPL plans, or any missed payments, can count against you. Many brokers suggest avoiding BNPL in the months before you apply.