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FCA researches borrowers' ability to repay and issues Policy Statement and guidance

What are the key points the FCA has commented on?

The regulator found from its research that 7.4 million people were struggling to pay bills and credit repayments in January 2024, down from 10.9 million in January 2023. This is still higher than the 5.8 million recorded in February 2020, before the cost of living squeeze began.

5.5 million people said they had fallen behind on or had missed paying, one or more domestic bills or credit commitments in the previous six months. This was down from 6.6 million people a year earlier. In the 12 months to January 2024, 2.7 million adults sought help from a lender, a debt adviser or another financial support charity because they found themselves in financial difficulty.

The FCA has also this month issued its Policy Statement PS 24/2: Strengthening protections for borrowers in financial difficulty: Consumer Credit and Mortgages (which is available at FCA Publication). This Policy Statement is intended to build on the FCA’s Tailored Support Guidance (TSG) and to provide a stronger framework for firms to protect customers who are facing payment difficulties. The FCA is doing this by incorporating relevant aspects of its TSG for consumer credit, mortgages and overdrafts into the Handbook, as well as introducing further targeted changes.

In addition, the FCA’s Finalised Guidance FG 24/2: Guidance for firms supporting existing mortgage borrowers impacted by rising living costs (which is available at FCA Publications ) has been published this month. The purpose of this guidance is to ensure that firms are clear about the effect of the FCA’s rules and the range of options they have to support their customers, including those who are facing higher interest rates alongside the higher overall cost of living.

The new rules brought into effect by PS 24/2 will come into force on 4 November 2024. By incorporating aspects of its tailored support guidance into its Handbook, the FCA is:

  • expanding protections beyond customers who have already missed payments to those in or at risk of payment difficulty,
  • widening the forbearance options firms should consider and ensuring that they take reasonable steps to ensure that their arrangements remain appropriate,
  • enhancing expectations around firms’ customer engagement and providing information, including information on money guidance and debt advice, and
  • requiring credit firms to consider customers’ circumstances when providing forbearance (which is already expected for mortgage lenders)
The FCA is also introducing additional improvements beyond the TSG:
  • introducing guidance to help firms determine their necessary and reasonable costs in setting fees and charges, and
  • allowing mortgage lenders greater scope to clear a payment shortfall by capitalising it, meaning that customers are better able to access new products and build their credit scores.
The FCA will engage with a range of stakeholders about the impact of this intervention. As part of its ongoing supervision of firms, it will continue to monitor market and regulatory data and intelligence, which includes measures relating to customers in financial difficulty. It will use this data to identify outlier firms and products and to assess the support and outcomes customers with financial difficulty receive. It will also monitor complaints and information received from the Financial Ombudsman Service regarding the treatment of customers with financial difficulty.


How can we help you?

Thistle Initiatives has supported lending firms for over 10 years as a trusted compliance and regulatory advisor. In addition to assisting you as-and-when, our team of specialists can serve as your right hand in meeting and complying with FCA regulations. We understand the importance of staying up-to-date and compliant and are dedicated to providing the guidance and support needed to do so.

Are you looking for help with your lending governance arrangements, or more general regulatory questions? If so, we can help in any of the following ways;

•    Reviewing your arrangements for assisting consumer credit borrowers experiencing financial difficulties.
•    Reviewing your arrangements for assisting mortgage borrowers experiencing financial difficulties.
•    Verifying whether your arrangements in these areas are in line with the Consumer Duty.
•    Ensuring that your compliance monitoring in this area is adequate.
•    Reviewing management reporting and information.

Contact our specialist team now to schedule a free consultation. Get in touch with us by calling 020 7436 0630 or sending an email to