KEY THEMES+ ¦ DEMSA Summary

What you need to know this week

  • The Bank of England held Bank Rate at 3.75% unanimously, while signalling readiness to act if inflationary pressures persist.
  • Labour market pressure remains evident, with pay growth slowing to 3.8% and unemployment holding at 5.2%.
  • Gambling-related debt pressures have intensified, with more than 21,000 people seeking support in January 2026 and disclosed debt exceeding £7.2m in 2025.
  • National debt advice demand has accelerated, with National Debtline recording its busiest ever start to a year in January and February 2026.
  • StepChange’s latest data shows problem debt remains widespread, with 51% of UK adults having experienced it and average client debt burdens rising further in 2025.
  • Scotland’s Stage Three Review proposes 52 recommendations to modernise statutory debt solutions and make the insolvency regime more person-centred and technology-enabled.
  • The Government’s 2026–2030 debt management strategy focuses on prevention, fair resolution and improved skills and technology across public sector debt management.
  • FCA and FOS redress reform is advancing, signalling likely changes to complaint handling policies and procedures.
  • New EBA and ECB draft guidelines would require firms to embed vulnerability considerations across product design, communications, support and governance.
  • FCA PS26/2 strengthens expectations on operational incident reporting and third-party risk management for firms reliant on outsourced and digital services.
  • February 2026 personal insolvency volumes increased materially, including a record monthly high for DROs and 11,609 individual insolvencies in England and Wales.
  • Key diary items include the Affordability Summit on 14 April 2026 in Manchester and the VRS conference on 7 May 2026 at Nottingham Forest Football ground.

Key Themes

Macroeconomic and household financial pressure

  • The text highlights a stable Bank Rate at 3.75%, slower pay growth at 3.8%, and unemployment unchanged at 5.2%.
  • It also points to continued cost-of-living pressure and increased concern linked to the Middle East situation.
  • This matters because affordability stress, arrears risk and demand for support services are likely to remain elevated across consumer finance portfolios.
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Debt advice demand and consumer distress

  • GamCare and PayPlan data shows gambling-related debt rising sharply, with higher volumes of people seeking support and a marked increase in average debt.
  • National Debtline reported record call volumes in January and February 2026, while StepChange reported that 51% of UK adults have experienced problem debt.
  • This matters because firms in credit, collections and debt resolution should expect sustained demand, more complex customer needs and higher vulnerability prevalence.
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See also  KEY THEMES+ ¦ DEMSA Summary

Insolvency and statutory debt solution reform

  • The Scottish Stage Three Review concludes that existing statutory debt solutions are no longer fully aligned to current economic realities and proposes 52 recommendations.
  • February 2026 insolvency data for England and Wales shows higher volumes year on year and month on month, including a record high for DROs.
  • This matters because providers, creditors and advisers may need to prepare for further operational, policy and customer outcome changes across formal debt remedies.
    link, link

Government debt management and public sector collection approach

  • The Government’s 2026–2030 strategy is framed around preventing avoidable debt, resolving debt fairly and improving skills and technology.
  • The text also highlights emphasis on data sharing, vulnerability identification, digital tools, AI and a continued firm stance on deliberate non-payment and fraud.
  • This matters because public and private sector collection strategies may become more data-led, more segmented and more focused on affordability-based repayment.
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Regulatory change in redress, resilience and consumer finance

  • FCA redress reform, developed with FOS, is presented as part of a broader set of March 2026 announcements likely to affect complaint handling.
  • FCA PS26/2 confirms stronger rules and guidance on operational incident reporting and third-party risk.
  • FCA Consumer Finance priorities also indicate more risk-based and data-driven oversight, alongside continued focus on debt advice and market outliers.
  • This matters because firms should review governance, complaint handling, supplier oversight, MI and regulatory reporting readiness.
    link, link, link

Vulnerability, fair treatment and consumer understanding

  • The EBA and ECB draft guidelines set out expectations for identifying, assessing and responding to vulnerability across the retail financial services lifecycle.
  • The text also notes relatively limited direct reference to vulnerability in the FCA’s Consumer Finance priorities compared with other sectors.
  • This matters because firms may need to strengthen vulnerability frameworks across product design, communications, monitoring, training and governance.
    link

Data governance and lawful basis changes

  • The ICO has updated guidance following DUAA 2025, including recognised legitimate interest, legitimate interests and purpose limitation.
  • The text highlights new pre-approved public interest conditions and clearer safeguards on reuse of personal information for new purposes.
  • This matters because firms handling customer and vulnerability data should reassess lawful basis decisions, reuse controls and documentation.
    link, link, link, link
See also  KEY THEMES+ ¦ DEMSA Summary

Industry publications and scheduled events

  • The text references updated industry commentary on vulnerability, household financial stress and senior management priorities in consumer finance.
  • It also lists a LinkedIn Live on Friday 27/3/2026, the Affordability Summit on 14 April 2026 at the Core Technology Facility in Manchester, and the VRS conference on 7 May 2026 at Nottingham Forest Football ground.
  • This matters because these publications and dates indicate current areas of market focus across affordability, vulnerability, data and regulatory expectations.
    link, link, link, link, link, link, link, link

Key Statistics

  • Bank Rate was maintained at 3.75%.
  • Earnings, excluding bonuses, grew at an annual rate of 3.8%, down from 4.1%.
  • The unemployment rate was 5.2%.
  • 21,000+ people sought financial support for gambling-related debt in January 2026 alone.
  • Disclosed gambling-related debt among GamCare users exceeded £7.2m in 2025, versus £2.8m in 2024.
  • Average gambling-related debt reached £21,269 in 2025, up from £13,876 in the previous year.
  • National Debtline received 26,500 calls in January 2026 and 27,400 calls in February 2026, a 3% rise.
  • 51% of UK adults have experienced problem debt.
  • 44% told no one about their financial struggles.
  • 79% said their debt problems caused significant stress.
  • 163,916 clients completed debt advice for the first time in 2025.
  • Average unsecured debt increased by 8%, from £15,672 in 2024 to £16,874 in 2025.
  • Average energy arrears grew by 9%, from £2,340 to £2,560.
  • Combined average arrears and unsecured debt increased from £17,936 in 2024 to £19,701 in 2025.
  • The Scottish review sets out 52 recommendations, with 4 urgent core areas requiring immediate attention.
  • 8,000 public servants working in debt management recover over £100 billion every year.
  • There were 8,766 Breathing Space registrations in February 2026.
  • 8,661 were Standard breathing space registrations and 105 were Mental Health breathing space registrations.
  • In February 2026, 11,609 individual insolvencies were registered in England & Wales.
  • The February 2026 total comprised 768 bankruptcies, 4,210 DROs and 6,631 IVAs.
  • The previous monthly high for DROs was 4,185 in August 2025.
  • Money Wellness handled 2,517 DROs and the National Association of Citizens Advice Bureau handled 1,165.
  • In February 2026, there were 138 individual insolvencies in Northern Ireland, comprising 109 IVAs, 20 DROs and 9 bankruptcies.
See also  KEY THEMES+ ¦ DEMSA Summary

Newsletter Contents

  • Bank Rate, pay growth and unemployment data frame the backdrop of continued household financial pressure.
  • Gambling-related debt and support demand are rising sharply, with affordability implications for firms assessing unusual spending patterns.
  • The latest VRS update is flagged as containing useful statistics on vulnerability-related developments.
  • Household financial stress and consumer concerns about debt advice engagement are highlighted through recent published commentary.
  • National Debtline and StepChange data point to sustained and growing demand for debt advice services.
  • Scotland’s statutory debt solution regime is under review, with reform focused on accessibility, consistency and modernisation.
  • Government debt management reform is moving towards earlier intervention, affordability-based repayment and stronger use of data and technology.
  • Redress reform, operational resilience rules and Consumer Finance priorities signal a continued shift towards more targeted regulation and supervision.
  • Vulnerability remains a central cross-sector issue, with European guidance setting out more explicit expectations than some domestic consumer finance material.
  • February 2026 insolvency statistics show higher case volumes, record DRO activity and backlog effects from system change.
  • ICO guidance updates place lawful basis, purpose limitation and reuse of personal data high on the governance agenda.
  • The text closes with scheduled industry activity including a LinkedIn Live on 27/3/2026, an Affordability Summit in Manchester on 14 April 2026 and a VRS conference on 7 May 2026.

Find the full DEMSA newsletter, commentary and links here

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