Alternatives to high-cost credit

Our report sets out actions and recommendations to improve the availability and awareness of alternatives to high-cost credit.

Read: Alternatives to high-cost credit report (PDF)

Our review of high-cost credit identified significant harm to consumers using high-cost credit, many of whom are vulnerable. As a result, we are implementing wide-ranging reforms of the rent-to-own, catalogue credit and store cards, buy now pay later offers, home-collected credit and overdraft markets.

We have also looked at alternatives to high-cost credit, recognising that not all consumers will have access to mainstream credit, and that lower-cost and non-credit options may exist. We set out our approach to alternatives in CP18/35.

An update on our approach

This report provides an update on the key issues we identified in CP18/35. We:

  • examine the market for alternatives to high-cost credit by looking at consumer demand and the availability of credit and non-credit alternatives
  • set out the actions we have taken following the commitments we made in our high-cost credit publications of November and December 2018
  • explain our and other organisations’ roles in supporting alternatives to high-cost credit 

Who may be interested

The paper will likely to be of interest to:

  • providers of lower cost credit, including credit unions and community development finance institutions (CDFIs)
  • organisations that work with consumers who use high-cost credit products, including registered social landlords (RSLs), local authorities, charities and consumer groups
  • firms and individuals seeking to innovate in the area of social finance
  • trade bodies and associations representing any of the above
  • relevant Government departments
  • providers of second-hand household goods, including reuse centres

What we will do next

Where we can make a difference to the availability or awareness of alternatives, we will do so in the ways set out in the report. Taking account of our remit, we are not the most appropriate authority to address some of the challenges around alternatives to high-cost credit. In many instances, others can take the lead more effectively.