What you need to know this week
- MaPS SFS governance: implementation remains on track for the first Monday in April 2026, signalling operational change for how Standard Financial Statement inputs may be applied across advice and collections.
- Government debt strategy: cross-sector work continues into 2026, with implications for public-sector recovery approaches and private-sector collaboration.
- Bank of England decision: Bank Rate reduced to 3.75% on 18/12/2025 following a 5–4 MPC vote, affecting affordability dynamics, arrears risk, and collections segmentation.
- Labour market softening: unemployment rose to 5.1% (three months to October 2025) alongside declines in payrolled employees, increasing risk of payment stress and higher inbound vulnerability flags.
- BNPL/DPC regulation timetable: FCA regulation for Deferred Payment Credit is positioned to go live on 15/07/2026, requiring operational readiness across affordability, disclosures, complaints and Consumer Duty alignment.
- Contactless rules change: from March 2026, the £100 cap will be removed, shifting responsibility to firms to set limits under strong fraud controls and to offer customer-configurable controls.
- MaPS debt advice impact (2024/25): outcome evidence continues to build, including material extra-income identification and high prevalence of deficit budgets among advised cohorts.
- AI adoption in advice operations: use cases cited include AI-supported case recording and advice letter generation, indicating productivity and quality impacts that may influence operating models.
- Open banking progress: FCA/PSR reporting highlights accelerating adoption and the increasing role of Variable Recurring Payments, relevant to time-to-pay and flexible repayment mechanisms.
- FCA Mortgage Rule Review (FS25/6): roadmap signals a multi-year programme into 2027, including themes of access, later life lending, innovation and vulnerability protections.
- Insolvency system change: Insolvency Service case management migration (from 01/11/2025) temporarily reduced processing volumes and created IVA registration backlogs, affecting market signals and forecasting.
- Sector benchmarks: StepChange November 2025 metrics show continued digital-first demand and stable underlying client characteristics, supporting comparative performance assessment.
Key Themes
Macroeconomic conditions and consumer headwinds link, link
- Monetary policy easing and a softer labour market point to shifting affordability and arrears risk.
- Bank Rate to 3.75%: changes affordability assumptions and may influence early-stage delinquency rates, forbearance demand, and credit risk strategies.
- Unemployment and payroll declines: increases probability of short-term income shocks, requiring improved vulnerability identification, tailored comms, and repayment flexibility.
Public-sector coordination and standards development
- MaPS SFS governance remains on track for April 2026, alongside forward work on the government debt strategy and Fairness Group initiatives.
- For financial services and collections, standard-setting and public-sector strategy alignment can change customer expectations and influence best practice benchmarks on ability-to-pay and communications.
Consumer credit regulation readiness: BNPL / Deferred Payment Credit link
- BNPL/DPC growth and upcoming FCA regulation (15/07/2026) implies a material compliance and operating-model uplift.
- Firms should expect increased scrutiny on creditworthiness/affordability assessment, disclosures, complaints handling, and Consumer Duty outcomes for interest-free instalment credit.
Payments policy and consumer control: contactless limits link, link, link
- Removal of the £100 cap from March 2026 increases the onus on firms’ fraud controls and customer safety mechanisms.
- For credit and debt practitioners, increased transaction frictionlessness can affect spend behaviour, particularly on credit cards, with downstream implications for arrears and affordability.
- Economic abuse risk is highlighted as a key vulnerability consideration, requiring firms to ensure controls and customer-configurable settings do not inadvertently increase harm.
Debt advice outcomes and service transformation (MaPS impact report 2024/25) link
- MaPS-funded services report strong recommendation rates, budgeting improvements, and extra-income identification at scale.
- For lenders, servicers, and debt solution firms, these outcomes indicate the likely profile and needs of customers entering advice pathways, supporting improved referral routes, breathing space handling, and sustainable repayment alignment.
- Operational transformation signals include AI-assisted note-taking and shorter letters, highlighting efficiency levers that may reset service expectations and QA approaches across the sector.
Open banking and Variable Recurring Payments: pathway to flexible repayments link, link
- VRPs are positioned as an increasingly material component of open banking transactions, with potential applicability to time-to-pay and debt remedy solutions.
- For credit management and collections, VRPs and open banking data can support dynamic affordability-based payment schedules, reduce missed payments, and improve customer outcomes versus rigid payment rails.
Mortgage regulation reform programme (FS25/6) link
- FCA signals a multi-year reform agenda through 2027, including access, later life lending, innovation, and vulnerability protections (including economic abuse).
- This matters for debt and credit practitioners given connections to consolidation, arrears servicing, and customer communications standards under Consumer Duty and related guidance.
Insolvency and statutory protections: current signals and operational distortions link
- Insolvency volumes fell in November 2025; the system migration created temporary backlogs, requiring caution in interpreting monthly IVA trends.
- High DRO volumes remain structurally elevated since the April 2024 fee removal; for creditors, DRO trajectory affects recovery expectations and portfolio performance.
- Breathing Space registrations remain substantial; providers’ market share informs operational liaison needs and process optimisation.
Vulnerability and capability building link, link, link, link
- Practical resources focus on identifying vulnerability, winter risk factors, and operational delivery through people/process/technology.
- For financial services and collections, these resources support consistent vulnerability frameworks, better evidence capture, and more effective adjustments aligned to Consumer Duty expectations.
Judgments data and system modernisation link, link
- Themes include scale of live judgments, low satisfaction marking, need for clearer comms, and automation/smart data opportunities.
- For credit risk and collections, improved judgment data quality and taxonomy can materially enhance decisioning, treatment strategies, and responsible lending/collections practices.
Insurance affordability and regulatory focus link, link, link, link
- FCA response signals expanded work on insurance market standards; Fair4All’s pilot direction indicates product/route-to-market experimentation for underserved segments.
- For debt and credit teams, insurance affordability pressure can drive prioritisation trade-offs in household budgets, shaping arrears risk and customer support needs.
Industry collaboration and operational performance improvements link, link, link, link
- Award recognition and case studies reinforce momentum behind digital inclusion, vulnerability design, and contact centre transformation.
- For operational leaders, quantified performance uplift examples inform business cases for automation, workflow redesign, and service-level recovery strategies in regulated environments.
Events and forward diary
- MEGA.AI – CSA supplier member webinar – 29/01/2026.
Key Statistics
- Bank Rate reduced to 3.75% on 18/12/2025; MPC vote 5–4.
- UK unemployment rate increased to 5.1% (three months to October 2025).
- Payrolled employees fell 149,000 (-0.5%) between October 2024 and October 2025; early estimate for November 2025 down 171,000 (-0.6%) year-on-year to 30.3m.
- FCA analysis: DPC lending grew from £0.06bn (2017) to over £13bn (2024); 20% of UK consumers (10.9m adults) used DPC in the 12 months to May 2024.
- MaPS community debt advice funding: £30m across nine regions; 116,887 clients served.
- MaPS-funded services: 729,265 clients seen (1 April 2024 to 31 March 2025); 87% would recommend; 76% now checking budget/balances; 64% took steps to make money go further; £85m extra income identified; £3.1bn debt disclosed by clients (nationally accessible and business debt advice).
- MaPS national telephone/digital funding: £37m; 592,730 clients served; 56% declared a longstanding illness or disability.
- MaPS Business Debtline funding: £3m; 23,811 individual clients served.
- MaPS-funded DRO provision: £6m; 31,719 applications; £607m debt by value; submissions up ~45% vs previous year.
- Open banking: 16m+ users; open banking payments up 53% year-on-year; VRPs 16% of open banking transactions.
- Insolvencies (England & Wales) in November 2025: 9,343 total; 489 bankruptcies; 3,792 DROs; 5,062 IVAs.
- Breathing Space registrations in November 2025: 7,151 total; 142 mental health breathing spaces.
- StepChange November 2025: 13,659 completed full debt advice; 88% started online; deficit budgets 28%; average debts 8.
- Registry Trust insights: 5.4m live judgments; 12% marked satisfied; over a third under £500.
Newsletter Contents
- MaPS SFS governance and April 2026 implementation timeline; Fairness Group 2025 delivery areas and subgroup changes.
- Bank of England MPC decision reducing Bank Rate to 3.75% and vote split.
- ONS labour market indicators: unemployment increase and reductions in payrolled employees.
- BNPL/DPC market growth and July 2026 FCA regulation start date; readiness implications.
- AI adoption narrative and sector emphasis on human-in-the-loop and agent-assist approaches.
- Vulnerability capability resources: winter vulnerabilities challenge and practical identification guide.
- MaPS Christmas dinner research on generational cost burden and hosting dynamics.
- Contactless limits reforms: March 2026 rule change and customer control/fraud-control expectations.
- MaPS-funded debt advice impact report 2024/25: scale, outcomes, and AI-enabled efficiency examples.
- FCA/PSR open banking update: user growth, payment growth, VRPs, and UKPI formation intent.
- FCA Mortgage Rule Review (FS25/6): roadmap themes, vulnerability focus, and multi-year policy development.
- November 2025 insolvency and breathing space data; StepChange monthly client report benchmarks; collaboration case studies and webinar diary item.
Find the full DEMSA newsletter, commentary and links here
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