KEY THEMES+ ¦ DEMSA Summary

What you need to know this week#

  • Bank of England data (published 5/1/2026) showed net consumer credit borrowing rose to £2.1bn in November 2025, including £1.0bn on credit cards.
  • Annual growth in total consumer credit increased to 8.1% in November, with credit card borrowing growth rising to 12.1%.
  • Effective interest rates remained high, including interest-charging overdrafts at 21.57% and credit cards at 21.60%.
  • Mortgage approvals for house purchase fell to 64,500, while remortgaging approvals rose to 36,600.
  • StepChange recorded 3,958 website visitors on Christmas Day and 15,401 visitors across New Year’s Eve and 1 January combined, according to BBC coverage.
  • Money Advice Trust reported the first working days of January brought more calls than last year, with a record 1,365 calls on its busiest day.
  • Money Wellness reported “unprecedented” festive demand, with 6,083 people seeking support between Christmas Eve and Boxing Day (up 29% on last year).
  • FCA supervision of deferred credit products is expected from 15 July 2026, introducing clearer consumer information, stronger checks, and new consumer protections.
  • The ICO published a statement on agentic AI, signalling continued regulatory focus on AI developments.
  • The ICO supported expanded powers under the Cyber Security and Resilience Bill, including tighter incident reporting and stronger oversight of digital and managed service providers.
  • StepChange research (March 2025) estimated around 3% of UK adults (1.6m people) have experienced coerced debt, with 12% of its debt advice clients impacted.
  • The bulletin highlighted upcoming sector activity including MEGA.AI’s CSA supplier member webinar (29/1/2026) and the VRS conference (7 May 2026, Nottingham Forest Football ground).

Key Themes#

Consumer credit growth and borrowing mix

  • Bank of England figures showed higher net consumer credit borrowing in November 2025, with credit cards contributing £1.0bn of £2.1bn total.
  • Why it matters: accelerating borrowing volumes and card-led growth increase downstream arrears risk and demand for effective early intervention and segmentation.
  • Interest rates on key revolving products remained above 21%, reinforcing affordability pressure for indebted customers.
    link

Mortgage approvals and refinancing dynamics

  • House purchase approvals fell slightly while remortgaging approvals rose materially in November 2025.
  • Why it matters: shifting approval mix can alter customer affordability profiles and change the flow of borrowers into payment stress, particularly where refinancing is used to manage budgets.
    link
See also  DEMSA Key Themes ¦ Industry and Regulatory Developments

Post-Christmas debt advice surge and contact demand

  • BBC coverage referenced StepChange and Money Wellness reporting unusually high seasonal demand, alongside Money Advice Trust reporting record call volumes.
  • Why it matters: advice surges indicate heightened consumer stress and are likely to translate into increased inbound vulnerability disclosures and higher contact volumes for creditors and servicers.
    link

BNPL regulation and consumer understanding design

  • FCA supervision of deferred credit products from 15 July 2026 is expected to require clearer “key product information”, stronger affordability checks, and more explicit consumer rights and protections.
  • Why it matters: firms will need to redesign digital journeys and controls, and should expect supervisory focus on consumer understanding, “positive friction”, and treatment of vulnerable customers.
    link, link

AI governance and regulatory direction

  • The bulletin referenced a 2026 AI governance white paper summary and an ICO statement on agentic AI.
  • Why it matters: firms deploying scaled AI will need clear governance, oversight, and evidence of control aligned to regulatory expectations and operational risk.
    link, link

Cyber resilience, supply chain risk, and incident reporting

  • The ICO supported government plans to expand regulatory powers under the Cyber Security and Resilience Bill, with stronger oversight of digital service providers and MSPs and a greater focus on supply-chain interdependencies.
  • Why it matters: regulated firms reliant on third parties may need to strengthen outsourcing governance, supplier assurance, and incident response readiness against stricter reporting and enforcement expectations.
    link, link

Economic abuse, coerced debt, and vulnerability operating models

  • StepChange and SEA guidance framed coerced debt and economic abuse as prevalent and closely linked to debt advice and creditor engagement, with supporting domestic abuse statistics referenced from ONS.
  • Why it matters: firms may need explicit economic abuse pathways covering safe disclosure, recording permissions, staff training, evidence handling, and escalation where financial crime concerns overlap with vulnerability support.
    link, link, link, link, link, link, link, link, link, link, link, link

Insolvency regulation transition and professional standards

  • The IPA response to HM Treasury’s AML reform consultation emphasised preserving insolvency sector expertise, information-sharing with the FCA, and clarity on costs and “fit and proper” implications, alongside a new HMRC Insolvency Practitioner Handbook resource.
  • Why it matters: potential regulatory change and higher supervisory expectations could affect capacity, QA, permissions, and operational requirements across insolvency and related debt remedy pathways.
    link, link
See also  KEY THEMES+ ¦ DEMSA Summary

Outsourcing, offshore delivery, and regulatory notifications

  • Perch Connect positioned offshore contact centre outsourcing from Durban, supported by Procera, and the bulletin noted offshore outsourcing is likely to require a SUP 15 notification.
  • Why it matters: firms must evidence outcome control, QA, and third-party governance in line with Consumer Duty expectations, particularly where critical customer journeys are delivered offshore.
    link

Energy sector AI consultation learnings

  • Ofgem consultation feedback was summarised as highlighting training, digital transparency, and third-party and supply chain risk as AI use expands.
  • Why it matters: cross-sector themes reinforce the need to connect AI governance with vendor assurance, resilience controls, and evidence of responsible deployment.
    link, link

Key Statistics#

  • Net borrowing of consumer credit in November 2025: £2.1 billion (from £1.7 billion in October).
  • Net borrowing on credit cards in November 2025: £1 billion (from £0.7 billion in October).
  • Net borrowing through other consumer credit in November 2025: £1.1 billion (from £1 billion).
  • Annual growth rate for all consumer credit in November 2025: 8.1% (from 7.5%).
  • Annual growth rate for credit card borrowing in November 2025: 12.1% (from 10.9%).
  • Annual growth rate for other consumer credit in November 2025: 6.3% (from 6.0%).
  • Effective interest rate on interest-charging overdrafts: 21.57%.
  • Effective interest rate on personal loans: 8.68% (from 8.39%).
  • Effective interest rate on credit cards: 21.60% (21.54%).
  • Net mortgage approvals for house purchase: 64,500 (down 500).
  • Approvals for remortgaging: 36,600 (up 3,200).
  • StepChange website visitors on Christmas Day: 3,958.
  • StepChange website visitors on New Year’s Eve and 1 January combined: 15,401.
  • Money Advice Trust busiest single day calls: 1,365.
  • Money Wellness support requests between Christmas Eve and Boxing Day: 6,083 (29% increase on last year).
  • Money Wellness late-night contacts (10pm–3am) between Christmas Eve and Boxing Day: 1,334.
  • Money Wellness support requests over New Year: 5,820 (up 14%).
  • Money Wellness late-night contacts over New Year: 1,149.
  • Money Wellness contacts between midnight and 1am over New Year: 243.
  • Londoners expecting finances to improve: 38% (vs 26% nationally).
  • London renters worried about rising rents: 62%.
  • UK adults estimated to have experienced coerced debt: around 3% (equivalent to 1.6m people).
  • StepChange estimate of clients impacted by coerced debt: 12%.
  • SEA estimate of women affected by economic abuse last year: over 4.1m.
  • Police recorded domestic abuse-related crimes in England & Wales (year ending March 2025): 816,493 (vs 851,062 previous year).
  • CSEW estimate of people experiencing domestic abuse: 3.8m.
  • Cyber Security and Resilience Bill introduced to Parliament: 12 November 2025.
  • ICO response date: 23 December 2025.
  • FCA supervision of deferred credit products effective date: 15 July 2026.
See also  KEY THEMES+ ¦ DEMSA Summary

Newsletter Contents#

  • Bank of England November 2025 Money & Credit release covering consumer credit growth, rates, and mortgage approvals.
  • Seasonal spike in debt help-seeking reported by major advice charities and covered by national media.
  • Detailed festive-period demand metrics from Money Wellness, including high late-night engagement.
  • Regional sentiment findings from Lowell/Opinium showing higher optimism in London with ongoing rent anxiety.
  • Commentary on BNPL moving under FCA supervision from July 2026, focusing on intelligibility and consumer understanding.
  • Summary of expected BNPL operational impacts including disclosures, affordability checks, and “positive friction” design.
  • Reference to an ICO update on agentic AI and continued AI-related regulatory attention.
  • Overview of IPA concerns on AML reform and the importance of maintaining insolvency sector expertise and standards.
  • Publication note on a new HMRC Insolvency Practitioner Handbook resource for the profession.
  • ICO response to the Cyber Security and Resilience Bill, highlighting expanded scope, stronger powers, and supply chain risk.
  • Vulnerability policy focus on economic abuse and coerced debt, with links to codes, guidance, and support resources.
  • Sector updates spanning partnerships, outsourcing developments, AI-in-energy consultation learnings, surveys, and scheduled webinars.

Find the full DEMSA newsletter, commentary and links here

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