Reforms aim to help make consumer credit rules ‘fit for digital age’

May 19, 2026 - 11:49

The UK government has announced a major overhaul of consumer credit laws, aiming to drag the regulations into the 21st century. Economic Secretary to the Treasury and City minister Rachel Blake stated that the current Consumer Credit Act was written for a completely different era, long before smartphones, buy-now-pay-later services, and instant online loans became the norm.

The proposed reforms are designed to simplify the existing legal framework, which critics say is overly complex and rigid. The goal is to create a more flexible system that can adapt to new financial technologies without sacrificing consumer protection. Officials argue that the current rules often fail to account for how people actually borrow and spend money today, particularly through digital platforms.

A key part of the plan involves streamlining the information lenders must provide to borrowers. Instead of lengthy, confusing documents, the new rules would push for clearer, more concise disclosures that are easier for consumers to understand on a mobile screen. The reforms also aim to better regulate emerging credit products, like short-term installment loans and digital credit lines, which have exploded in popularity but often operate in a regulatory grey area.

The government hopes these changes will encourage responsible lending while also giving people more confidence to use digital financial services. By removing outdated bureaucratic hurdles, the new system is intended to be faster and cheaper for both lenders and borrowers. However, consumer groups have urged caution, warning that the drive for simplicity must not weaken protections for vulnerable people who might be targeted by high-cost lenders. The consultation on the proposed changes is now open, with the final legislation expected to be introduced next year.