KEY THEMES+ ¦ DEMSA Summary

What you need to know this week#

• Citizens Advice, IPPR and Policy in Practice set out reforms to targeted bill support and social tariffs that could save struggling households up to £950 a year across energy, water, broadband and motor insurance.
• Regulators, utilities and advice providers are converging on accelerated enrolment to social tariffs and Priority Service Registers, with data sharing, Ability to Pay, Vulnerability Management and Income Optimisation central to strategies going into 2026, including the Ofgem Debt Relief Scheme.
• Mortgage lending strengthened in Q3 2025, with 557,000 loans advanced (up 48% year on year), but affordability remains tight, particularly for first-time buyers paying around 22% of gross household income on mortgage payments.
• FCA Policy Statement PS25/11 introduces simplified mortgage rules (e.g. modified affordability assessments, more flexible term reductions, clearer interaction rules and retirement of outdated guidance), alongside a broader discussion paper on the future of the mortgage market, including rent-based affordability and later life lending.
• Bank of England data for October 2025, alongside StepChange commentary, shows a slowdown in net mortgage borrowing, approvals and consumer credit volumes, while suggesting unsecured borrowing is likely to rise into the Christmas period.
• StepChange polling indicates that 27% of British adults (around 14.3m people) expect to struggle to afford Christmas, with 8% relying on credit and many expecting to take more than six months to repay festive borrowing, underscoring persistent cost-of-living stress.
• The Insolvency Service has appointed Duncan Beach (formerly HSBC Managing Director – Global Head of Risk & Compliance Transformation) as CEO from 5 January 2026, with implications for Personal Insolvency Reform, creditor returns and suitability frameworks.
• UK Finance highlights a sharp escalation in fraud and compliance costs, with an estimated £38 billion annual compliance spend, £629.3 million stolen in H1 2025 and over 2 million confirmed fraud cases, emphasising economic crime as a strategic risk.
• The ICO reports that cookie enforcement has brought most of the UK’s most-used websites into compliance, giving an estimated 80% of UK internet users over 14 (around 40 million people) greater control over personalised advertising and tracking.
• The FCA has delayed delivery of the new CCR009 return for debt management firms to the end of February 2026, while retaining the 1 January–31 December 2025 reporting period and reinforcing channel-level data capture across digital and face-to-face approaches.
• FCA PS25/19 consolidates complaints reporting into a single return, enhances vulnerability data capture, removes group reporting and standardises six-monthly calendar reporting from 2027, while the FOS plans higher case fees, a new £2,000 allowance model and capacity to resolve 245,000 cases in 2026/27, including 60,000 motor finance commission complaints.
• Ecosystem collaborations (PayPlan–MorganAsh, Debtrak–Arum, IE Hub–Bristol/Wessex Water, Paylink–Nationwide) and cross-sector events continue to focus on vulnerability identification, data sharing, digital engagement and Ability to Pay, reinforcing partnership-based models for customer support.

Key Themes#

Targeted bill support, social tariffs and income optimisation link, link#

• Citizens Advice/IPPR/Policy in Practice blueprint – Sets out how redesigned bill support and better-targeted social tariffs across energy, water, broadband and motor insurance could save vulnerable households up to £950 annually, directly influencing disposable income, arrears risk and affordability calculations for lenders and utilities.
• MEGA.AI utility events and regulatory engagement – Regulators, service providers and advice organisations (including Policy in Practice, IE Hub, BSI, National Support Network, StepChange and VRS) are aligning on accelerated enrolment to social tariffs and Priority Service Registers, underpinned by data sharing between essential services, shaping how financial difficulty and vulnerability will be operationalised across sectors.
• Ability to Pay, Vulnerability Management, Income Optimisation and Ofgem Debt Relief Scheme – These elements are becoming core to treatment strategies in 2026, embedding benefits maximisation, concession access and debt relief options into end-to-end customer journeys in credit, utilities and collections.

Mortgage market dynamics and regulatory reform link, link, link, link#

• Q3 2025 mortgage activity and affordability – UK Finance notes 557,000 loans advanced in Q3 2025, 48% higher year on year, driven by refinancing and fixed-rate maturities, while first-time buyers face mortgage payments at 22% of gross income, intensifying pressure on household budgets and shaping risk in new origination cohorts.
• FCA PS25/11 – simplified mortgage rules – Introduces modified affordability assessments for beneficial remortgaging, allows term reductions without full reassessment, clarifies when interactions trigger advice, and replaces legacy guidance on maturing interest-only loans with fair-treatment requirements, giving firms more flexibility to restructure debt while maintaining Consumer Duty standards.
• DP25/2 – future of the mortgage market – Consults on using rent payment histories as standalone affordability evidence, recalibrating interest rate stress tests, developing later life lending frameworks and improving support for victims of economic abuse, signalling potential changes to underwriting, product design and vulnerability handling.
• BoE and StepChange October 2025 trends – Data on reduced net mortgage borrowing, lower approvals and slower consumer credit growth, alongside expectations of higher unsecured borrowing into Christmas, provide early indicators of shifting household financing behaviour relevant to credit risk and collections planning.

Cost-of-living pressures and festive credit stress link#

• StepChange Christmas polling – Finds that 27% of adults (around 14.3m people) will struggle to afford Christmas, rising to 31% among parents; 8% will rely on credit, with most expecting higher borrowing than last year and a significant proportion expecting repayment to take more than six months, highlighting elevated short-term and medium-term repayment stress for retail credit and collections portfolios.

Personal insolvency reform and leadership change link#

• Appointment of Duncan Beach as Insolvency Service CEO – Brings more than 20 years of risk and compliance transformation experience from HSBC into the leadership of the Insolvency Service from 5 January 2026, with likely influence over the design, cost and implementation of Personal Insolvency Reform.
• Debate on Personal Insolvency Reform (PIR) – Industry discussions emphasise uncertainty around the scope and cost of a more “nationalised” personal insolvency regime and highlight the importance of suitability statements and consumer understanding work in regulatory and legal sandboxes, signalling more scrutiny of how insolvency and debt solutions are explained and recommended to customers.

Economic crime, fraud and compliance burden link#

• Compliance spend and Money Laundering Regulations – UK Finance estimates that member firms spend £38 billion a year on compliance, with Money Laundering Regulations the largest contributor, underlining the resource intensity of economic crime frameworks for banks and credit providers.
• Fraud levels and trends – Fraud accounts for over 40% of reported UK crime, with £629.3 million stolen in H1 2025 (up 3% year on year) and more than 2 million confirmed fraud cases (up 17%), illustrating the scale of fraud risk that must be factored into credit losses, customer protection, and operational capacity.

Data protection, cookies and digital tracking link#

• ICO cookie enforcement outcomes – Action by the ICO has brought the majority of heavily used UK websites into compliance and given an estimated 80% of users over 14 (around 40 million people) greater control over advertising cookies, requiring financial services firms to ensure that digital consent, tracking and analytics configurations meet regulatory expectations while supporting effective engagement and measurement.

Complaints, redress and dispute resolution reform link, link, link, link#

• FCA PS25/19 – single complaints return and enhanced vulnerability reporting – Consolidates five complaints returns into one, introduces permission-based reporting, removes group-level submissions, updates the taxonomy and mandates recording of vulnerability-related complaints, with fixed six-monthly calendar reporting from 2027, requiring substantial data, systems and MI changes across firms.
• FOS plans and budget consultation 2026/27 – Proposes higher case fees (£680), a larger levy (£86m), adjusted professional representative charging and a move from “three free cases” to a £2,000 allowance, while planning to receive 188,000 cases and resolve 245,000, including 60,000 motor finance commission cases and around 2,000 BNPL cases, signalling higher external dispute resolution volumes and cost exposure.
• Motor finance complaints handling pause lifted from 31 May 2026 – FCA will lift the pause on motor finance complaints handling on this date, providing a defined timeline for firms to prepare operational capacity, redress strategies and communication plans in anticipation of increased complaint activity.

Debt advice standards and regulatory reporting for debt management link, link#

• MaPS Standards Toolkit (draft) – MaPS is consulting on the first draft of its Standards Toolkit and seeking feedback from users of Customer Facing Assessment tools, setting the direction for advice standards, quality assurance and commissioning frameworks across funded debt advice.
• Delay to CCR009 returns for debt management firms – FCA has postponed the new CCR009 return to end-February 2026; firms will have 40 business days to submit data for 1 January–31 December 2025, including detailed channel fields such as web, chat, chatbot, phone and face-to-face, requiring robust data capture across all approach routes.

Ecosystem collaboration, vulnerability partnerships and sector standards link, link, link, link, link, link#

• CIVEA enforcement developments and ECB standards – Enforcement News and sector collaboration events emphasise the role of the Enforcement Conduct Board, vulnerability standards and Ability to Pay principles in shaping enforcement practice, which creditors must reflect in oversight and supplier governance.
• Debt Buyer, Debt Manager and BPO event in Manchester (4 December 2025) – Brought together buyers, managers, advice agencies and technology providers to examine collaborations, data sharing, CCR009, Product Sales Data, vulnerability and sector developments in debt support, reinforcing multi-party approaches to customer outcomes.
• PayPlan–MorganAsh partnership – Demonstrates how integrating a specialist vulnerability assessment partner can enhance vulnerability identification, scalability and support, strengthening Consumer Duty evidence and tailored treatment strategies.
• Debtrak and Arum “Arum approved” status – Illustrates how collections platforms are being validated within broader ecosystems focused on Ability to Pay, Vulnerability Management, Digital Engagement and Income Optimisation, informing platform selection and integration roadmaps.
• IE Hub with Bristol and Wessex Water – Uses IE Hub to collect budget information from water customers and signpost to National Debtline, providing a template for shared budget data and advice pathways that could be replicated across financial services and utilities.
• CIVEA ECB vulnerability event (27 November 2025) – Explores enforcement sector collaboration around ECB vulnerability and Ability to Pay standards, signalling increasing formalisation of vulnerability expectations across enforcement and creditor relationships.

Key Statistics#

• Up to £950 per year potential saving for struggling households from reformed bill support and targeted social tariffs across key regulated markets.
• 557,000 mortgage loans advanced in Q3 2025, a 48% increase on the same quarter of 2024.
• First-time buyers’ mortgage payments at around 22% of gross household income – the highest for nearly two decades.
• Net borrowing of mortgage debt at £4.3 billion in October 2025, down from £5.2 billion in September.
• Net mortgage approvals for house purchase at 65,000 in October (down by 600), and remortgage approvals at 33,100, the lowest since February 2025 (32,900).
• Net borrowing of consumer credit at £1.1 billion in October 2025, down from £1.4 billion in September; within this, credit card borrowing at £0.6 billion (down from £0.7 billion), and other consumer credit at £0.5 billion (down from £0.7 billion).
• Annual growth rate for all consumer credit at 7.2%; credit card borrowing at 10.9% (up from 10.8%); other consumer credit at 5.5% (down from 5.7%).
• 27% of British adults (around 14.3 million people) expect to struggle to afford Christmas; 31% among parents with children at home; 8% will rely on credit.
• Of those using credit for Christmas, 60% expect borrowing to be higher than last year; 87% link borrowing to higher living costs; 43% expect repayment to take more than six months, and 17% more than a year.
• Financial services firms are estimated to spend £38 billion annually on compliance.
• Fraud accounts for over 40% of all reported crime in the UK, with £629.3 million stolen in the first half of 2025 (a 3% increase on H1 2024) and over 2 million confirmed cases of fraud (a 17% increase year on year).
• ICO action has given an estimated 80% of UK internet users over age 14 (around 40 million people) greater control over cookie-based personalised advertising.
• FOS plans to increase the case fee to £680 and the compulsory levy to £86 million, with professional representative charges rising from £250 to £260 and the case credit increasing from £175 to £180.
• FOS expects to receive 188,000 cases in 2026/27 and to resolve 245,000 cases, including 60,000 motor finance commission cases, and around 2,000 expected BNPL-related cases after July 2026.
• The new CCR009 reporting period will cover 1 January 2025 to 31 December 2025, with firms having 40 business days to submit once the return becomes available.

Newsletter Contents#

• Regulatory focus on reforming bill support and social tariffs, including Citizens Advice/IPPR/Policy in Practice work on reducing household bills and improving targeted support.
• Cross-utility and regulatory collaboration on Priority Service Registers, data sharing and the Ofgem Debt Relief Scheme, with an emphasis on Ability to Pay, Vulnerability Management and Income Optimisation.
• Mortgage market update showing stronger lending volumes in Q3 2025 but persistent affordability challenges, especially for first-time buyers.
• FCA mortgage reforms in PS25/11 and DP25/2, including simplified rules for remortgaging, potential rent-based affordability assessments and changes to stress testing and later life lending.
• Bank of England and StepChange insights on falling net mortgage and consumer credit borrowing in October 2025 and expectations of rising unsecured borrowing into Christmas.
• Evidence from StepChange that a significant share of households will struggle to afford Christmas and will rely on credit, with extended repayment timelines.
• Appointment of Duncan Beach as CEO of the Insolvency Service from January 2026 and associated discussion of Personal Insolvency Reform and consumer understanding in sandbox environments.
• UK Finance analysis of escalating fraud and compliance costs, highlighting the dominance of fraud in UK crime and growing pressure on financial crime frameworks.
• ICO update on increased cookie compliance and enhanced user control over personalised advertising across major UK websites.
• FCA decisions on the timing and scope of CCR009 returns for debt management firms, including channel-level reporting requirements, and reference to Product Sales Data submissions.
• FCA PS25/19 reforms to complaints reporting, and FOS plans and budget for 2026/27, including higher case fees, revised allowances and capacity for motor finance commission and BNPL complaints.
• Sector collaborations and events, including CIVEA enforcement developments, MEGA.AI-sponsored debt support and utility sessions, MorganAsh–PayPlan, Debtrak–Arum, IE Hub–Bristol/Wessex Water, Paylink–Nationwide, and MaPS Standards Toolkit consultation.

Find the full DEMSA newsletter, commentary and links here

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