What you need to know this week
- UK economic growth remains weak, with 0.1% GDP growth in Q3 2025 and unemployment rising to 5%, raising expectations of a December interest rate cut.
- Energy debt repayment plans are lengthening significantly, with electricity arrears taking 97 weeks longer to clear compared with 2024.
- Product Sales Data (PSD) submissions under PS24/3 began on 11 November 2025, affecting creditors and debt buyers; CCR009 returns from the debt sector will follow in early 2026.
- Motor insurance premiums have fallen for three consecutive quarters, with average premiums £56 lower year-on-year.
- Homeowner and BTL mortgage arrears fell in Q3 2025, though possessions rose slightly but remain below long-term averages.
- Second charge mortgage lending rose sharply, with a 22% increase in volumes and 36% growth in value year-on-year.
- FCA continues to emphasise the tension between growth agendas and robust consumer protection, including oversight of BNPL and digital loan journeys.
- StepChange research highlights accessibility challenges for neurodivergent customers, with 97% reporting greater difficulty managing debt.
- ICO supports the introduction of the Cyber Security and Resilience Bill, strengthening obligations for incident reporting and regulator enforcement.
- Insolvency Service data shows continued Breathing Space compliance issues requiring creditor reminders.
- Households on water social tariffs increased by 22%, with 2m customers receiving support and rising registration on Priority Service Registers.
- FCA review finds many unregulated credit score builder products fail to deliver improved outcomes and may create consumer harm.
Key Themes
Economic and Market Conditions link
Slowing economic growth, rising unemployment and weakening labour markets indicate continued financial pressure on households. Motor premiums fell for a third consecutive quarter, providing some relief. For financial services and credit professionals, these trends signal increased affordability risks and potential rises in arrears.
Energy, Utilities and Essential Service Debt
Energy repayment plans link
Repayment timelines have lengthened dramatically, with arrears taking 97 weeks longer to repay than in 2024. This affects affordability assessments, DMP sustainability and I&E planning.
Water social tariffs link, link, link
A 22% rise in households on social tariffs and a 27% increase in PSR registrations reflect growing vulnerability and highlight the importance of income maximisation and cross-utility data sharing.
These developments matter for anyone supporting customers in arrears or designing support frameworks.
Regulatory Developments and FCA Priorities
PSD and CCR009 reporting link
This data submission cycle increases scrutiny across credit markets and requires debt solution providers to ensure consistency in data quality.
Digital journeys and BNPL oversight link, link
The FCA stresses the need for positive friction and clearer communications, especially where poorly designed digital journeys risk consumer harm.
Credit score builder review link
Weak evidence of score improvements and potential misleading reporting practices flag compliance risks and reinforce the need for accurate, responsible customer communications.
Vulnerability, Inclusion and Consumer Outcomes
Neurodiversity and debt advice link, link, link
Research shows 97% of neurodivergent customers find debt management harder and a third cannot access support in their preferred channel. This highlights the operational need for flexible communication and trained staff.
Vulnerability passport pilot link, link, link
The initiative aims to reduce repeated disclosures across sectors—critical for improving outcomes and reducing operational friction.
Debt, Arrears and Mortgage Market Trends
Mortgage arrears Q3 2025 link
Falls in arrears for homeowners and BTL properties show some stabilisation; however, affordability risks remain elevated.
Second charge mortgage growth link
Significant increases in lending volumes indicate rising demand for consolidation loans, relevant for assessing long-term customer affordability and financial resilience.
Cyber Security and Operational Resilience
Cyber Security and Resilience Bill link, link, link
The Bill introduces stronger regulatory powers, breach reporting within 24 hours, and penalties up to 4% of turnover. This matters for firms needing robust operational resilience frameworks and incident response procedures.
Breathing Space Administration and Compliance
Creditor reminders link,
link
Persistent non-compliance continues to prompt Insolvency Service reminders. For creditors, this highlights ongoing governance obligations and the importance of automated protections.
Industry Events and Sector Collaboration
Debt Buyer, Debt Manager & BPO Event – Lowry Hotel, 4 December 2025
Credit-Connect Manchester Event – 22 November 2025
CIVEA Enforcement Collaboration Event – London, 27 November 2025
Key Statistics
- UK GDP grew 0.1% in Q3 2025.
- UK unemployment rose to 5%, the highest since 2020–21.
- Energy debt repayment plans for electricity arrears now take 97 additional weeks to clear compared with 2024.
- Motor insurance premiums in Q3 2025 were £551 on average, £13 lower than Q2 and £56 lower year-on-year.
- Homeowner mortgage arrears fell 4% in Q3 2025; BTL arrears fell 8%.
- Second charge mortgage volumes increased 22% year-on-year in September 2025; value rose 36% to £202m.
- 59.5% of second charge lending was for debt consolidation.
- 2m households now receive water social tariff support; average bill reductions £120–£314.
- PSR registrations rose to 3,941,386 households, up 27%.
- 97% of neurodivergent individuals report difficulty managing debt; only 32% disclosed their neurodivergence to support services.
Newsletter Contents
- UK economic performance and labour market pressures
- Lengthening energy debt repayment times
- PSD submissions and CCR009 sector reporting
- Motor insurance premium reductions
- Mortgage arrears and possessions trends
- Growth in second charge mortgage lending
- FCA focus on digital journeys and BNPL oversight
- FCA review of credit score builder products
- Neurodiversity challenges in debt management
- Cyber Security and Resilience Bill
- Breathing Space creditor compliance reminders
Find the full DEMSA newsletter, commentary and links here
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