What you need to know this week
- StepChange Debt Charity Scotland reports average client debt of £20,116 (up 10% year-on-year), the highest level recorded in over a decade.
- 38% of StepChange Scotland clients were in energy arrears, averaging £2,600 per client, and two in three were in household bill arrears averaging £5,470 (up 85% since 2021).
- Firms with debt counselling and debt adjusting permissions face the CCR009 reporting window starting Monday 2 March 2026, with a backstop of 24 April 2026, ahead of July 2026 Duty Board reports.
- The FCA will publish its Regulatory Priorities report for Consumer Finance in March 2026, following the first insurance sector report and a blog on a “smarter approach” to priorities.
- The FCA updated “Consumer Duty board reports: good practice and areas for improvement” on 24 February 2026, adding insight for smaller firms.
- Ofgem’s price cap change for 1 April–30 June 2026 reduces typical dual-fuel Direct Debit bills by £117 (7%), around £10 a month, and 11% (£208) lower than April–June 2025.
- Ofgem will run a lower standing charge tariff pilot from April 2026 for one year with EDF, E.ON, Octopus Energy and British Gas (eligibility requirements apply).
- Ofgem plans a targeted Debt Relief Scheme (DRS) in 2026 to write off £500m of debt for around 195,000–200,000 vulnerable households, with effectiveness dependent on data sharing (including DWP data on means-tested benefits).
- PayPlan has maintained the BSI Kitemark™ for Inclusive Service in consumer vulnerability management, reinforcing ongoing inclusive design and vulnerability standards.
- The FCA has published CP26/7 proposing mandatory credit reporting requirements and connected obligations across credit and mortgage markets, with responses due by 1 May 2026.
- CP26/7 also proposes that FSMA-regulated firms report fully paid CCJs and Decrees as satisfied when they become aware, addressing a current gap where Registry Trust data indicates only around 12% are marked satisfied.
- Key dates for engagement include 2 March 2026 (11:00–12:30) webinar, 24 March 2026 Manchester event, 14 April 2026 Affordability Summit (Manchester), and 7 May 2026 VRS conference (Nottingham).
Key Themes
- Consumer debt pressures and arrears signals
- StepChange Scotland reports higher average debt and significant arrears across energy and household bills among people seeking help.
- Why it matters: increases in arrears volumes and essential-bill stress will affect collections strategies, vulnerability approaches, and downstream credit risk management.
- StepChange highlights shifting debt composition and intensity, supporting sector focus on affordability and outcomes monitoring.
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- Regulatory reporting deadlines and Consumer Duty readiness
- CCR009 reporting begins 2 March 2026 with a 24 April 2026 backstop, aligned with regulatory updates ahead of July 2026 Duty Board reports.
- Why it matters: firms need coordinated regulatory delivery across MI, governance, and consumer understanding evidence to meet Duty expectations.
- The FCA’s updated good/poor practice examples include added insight for smaller firms.
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- FCA Regulatory Priorities framework and sector expectations
- The FCA is publishing sector-specific Regulatory Priorities reports, with Consumer Finance due March 2026, and encourages boards and chief executives to act on priorities.
- Why it matters: clear prioritisation supports planning, resourcing, and assurance for debt management, debt resolution, and related credit activities.
- The FCA emphasises responsible AI adoption using Sandbox, Innovation Pathways and AI Lab.
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- Essential services cost movements and standard financial statement impacts
- Ofgem’s Q2 2026 cap reduces typical bills while other essential services are noted as rising, and new MaPS SFS figures take effect in April 2026 with system update notifications.
- Why it matters: affordability assessments, forbearance decisions, and treatment pathways will need to reflect updated expenditure benchmarks and changing essential costs.
- Ofgem introduces a lower standing charge tariff pilot and plans a targeted DRS with dependencies on data sharing.
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- Credit information market reforms under CP26/7
- CP26/7 targets inconsistent CRA coverage, fragmented reporting, thin files/credit invisibility, slow correction of errors, and updating of satisfied judgments.
- Why it matters: changes to reporting obligations and data frameworks will impact lenders, servicers, debt purchasers, and third parties that rely on credit file data.
- The FCA links expectations to Consumer Duty and flags obligations around transfer of agreements to minimise adverse impacts.
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- Reporting satisfied CCJs and Decrees
- The FCA proposes that FSMA-regulated firms report fully paid CCJs/Decrees as satisfied when they become aware, including firms not reporting to CRAs.
- Why it matters: accurate satisfaction status reduces consumer harm from outdated public register and CRA data, and affects creditworthiness decisions and collections outcomes.
- Registry Trust data indicates only around 12% are marked satisfied, with a declining proportion over time, and CIMS highlights consumer unawareness of proof-of-payment requirements.
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- AI governance and cross-regulator focus (Mills Review and ICO statement)
- The FCA’s review led by Sheldon Mills considers how AI will reshape retail financial services towards 2030 and beyond, alongside an ICO joint statement on privacy risks of AI-generated imagery.
- Why it matters: firms need governance, transparency, and controls for AI-enabled customer journeys, particularly where vulnerability and affordability assessments are embedded.
- The text highlights increasing digital engagement in debt advice and the importance of trust and safeguards as adoption accelerates.
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- Sector standards, accreditation and capability-building
- PayPlan’s recertification to the BSI Kitemark™ for Inclusive Service signals sustained focus on inclusive service design and vulnerability management.
- Why it matters: consistent standards support evidence of good practice and operational delivery in vulnerability identification and support pathways.
- CSA’s 2025 Annual Report notes growth in engagement, learning programmes, training products, advocacy, and data-gathering participation.
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- Funding, market structure and policy backlog
- NatWest Group pledges £8m over two years to PayPlan and StepChange, and aims to support 50,000 people with free financial education during 2026.
- Why it matters: funding influences capacity for advice delivery, innovation, and sustainable operations, and highlights broader sector resourcing constraints.
- The text flags interest in revisiting SDRPs and notes PIR scope does not include a ‘settlement in full’ remedy like SDRP.
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- Insolvency trends and IVA performance
- 2025 IVA registrations increased vs 2024, with termination rate patterns outlined over one-, two-, three-year and lifetime horizons.
- Why it matters: IVA volume and termination rates affect creditor recoveries, operational planning, and customer outcomes monitoring across insolvency and collections.
- Concentration among a small number of firms shapes counterparty exposure and oversight considerations.
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Key Statistics
- £20,116 average debt among StepChange Debt Charity Scotland clients (February 2026), 10% year-on-year increase.
- 38% of clients in energy arrears, averaging £2,600 per client.
- Two in three clients in arrears on household bills, owing an average £5,470 each, up 85% since 2021.
- CCR009 reporting window starts 2 March 2026 with a backstop of 24 April 2026.
- Energy price cap reduction of £117 (7%) for a typical Direct Debit household from 1 April to 30 June 2026, around £10 a month.
- Compared to April–June 2025, the cap level is 11% (£208) lower.
- Household energy debt reached £4.4 billion in Q2 2025; projections suggest £5.5 billion to £7 billion by end of 2026 without more aggressive intervention.
- Average energy arrears rose by 20% to £2,445 between December 2023 and December 2025.
- DRS aims to write off £500m for approximately 195,000–200,000 vulnerable households.
- Registry Trust data indicates only around 12% of CCJs and Decrees are marked as satisfied.
- 71,855 IVAs were registered in England & Wales in 2025 vs 67,089 in 2024.
- 6% of IVAs registered in 2024 terminated within one year; 13.2% two-year termination rate for IVAs registered in 2023; 21% three-year termination rate for IVAs registered in 2022; 34% lifetime termination rate for IVAs registered between 2016 and 2018.
- NatWest pledged £8m over the next 2 years to PayPlan and StepChange and aims to support 50,000 people with free financial education during 2026.
- PayPlan ambition to deliver approximately 250,000 debt advice sessions across the UK throughout 2026.
- StepChange reported 91% of debt advice sessions started digitally (January 2026).
Newsletter Contents
- StepChange Scotland data points to rising client debt levels and growing essential-bill arrears.
- CCR009 reporting deadlines create a near-term delivery focus alongside Duty Board report preparations.
- FCA sector-specific Regulatory Priorities approach expands beyond insurance to Consumer Finance in March 2026.
- FCA refreshed examples of Duty Board report practice add additional direction for smaller firms.
- Ofgem’s Q2 2026 cap reduction coincides with wider household cost pressures and April 2026 SFS updates.
- Ofgem pilots a lower standing charge tariff and plans a DRS with dependencies on benefit-related data access.
- PayPlan maintains the BSI Inclusive Service kitemark, reinforcing vulnerability and inclusive design standards.
- CSA’s 2025 Annual Report highlights growth in engagement, training and advocacy.
- NatWest funding package supports capacity across two major debt solution providers and links to financial education targets.
- CP26/7 proposes mandatory credit reporting improvements and a clearer framework for sharing and using credit information.
- CP26/7 includes proposals to improve satisfied CCJ/Decree reporting where current satisfaction marking is low.
- 2025 IVA registration volumes and termination-rate patterns provide an updated view of insolvency outcomes.
Find the full DEMSA newsletter, commentary and links here
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