Our Spending and Lending report delivers essential insights into
how UK consumers are managing their finances right now.
This edition reveals a fundamental shift: the consumer mindset has
changed. Old stigmas around longer mortgage terms, second-hand
purchases and extended device ownership are breaking down.
Borrowers are demonstrating financial sophistication, using credit
strategically and prioritising flexibility, ease and speed. This report
explores those shifts in detail across every major credit market.
Demand has rebounded as consumers adapt to
stable rates at 3.75%. 11% of originations now exceed
35-year terms as borrowers prioritise flexibility.
Lenders are expanding high loan-to-income offerings
and reaching thin-file borrowers previously locked
out of mainstream lending.
Outstanding debt exceeds £79bn, up 15.1% on
pre-pandemic levels. Consumers are using cards
strategically for cash flow management and
consumer protection, with repayment behaviours
holding steady and arrears remaining stable.
Retail-linked financing has driven volumes to
measurement period peaks. The loan is competing
seriously with credit cards and BNPL, though
arrears are climbing in the high-cost, short-term
segment, a potential early warning signal.
Arrears have stabilised after two years of pressure
as consumers adapt. EV growth now represents
41% of UK manufacturing output. However, the
proposed redress scheme covering claims back to
2007 presents significant operational challenges
for lenders.
Revolving retail is repositioning for larger
purchases while BNPL spending rose 20% to £74
per month. 45% of consumers now use SIM-only
tariffs, holding handsets longer. The re-commerce
market is projected to reach £12.4bn by 2028.
Affordability sits at the heart of every lending decision,
but the way consumers manage their money has
fundamentally changed.
Our data shows a clear shift: borrowers are financially
savvy, choosing flexibility over convention and using tools
that prioritise ease and speed. Longer mortgage terms free
up capital. Re-commerce platforms turn items into cash in
minutes. BNPL embeds itself at checkout. For lenders,
understanding these changes is key to lending responsibly,
expanding access and growing sustainably.
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