Navigate page Get in touch Overview Unsecured Lending Auto Finance Mortgages Outlook How can we help? Get in touch Affordability and credit updateSpring 2026Credit Landscape: Data-driven insights into consumer trends and affordability Since our previous update, the macroeconomic environment has shifted materially, with geopolitical developments playing an increasingly important role in shaping the UK outlook. The conflict in the Middle East, which began at the end of February, alongside continued disruption and uncertainty surrounding the Strait of Hormuz, has materially weakened the UK growth outlook. GDP forecasts have been revised down sharply, and downside risks have intensified relative to earlier in the year.As a net importer of energy, the UK remains highly exposed to global energy and commodity markets. Wholesale gas prices have risen significantly since late February, feeding through to power markets and anchoring higher prices across the energy complex. As a result, the July Ofgem energy price cap is now expected to increase by around 10-15%, placing additional pressure on household budgets. These higher energy costs are contributing to headline inflation and are adding further operational strain to energy‑intensive industries that are already facing elevated input cost pressures.This backdrop, alongside the Bank of England’s unanimous decision on 19th March to hold the base rate at 3.75%, was followed by a repricing in mortgage markets. As lenders reassessed funding conditions and adjusted rates and product availability more than 1,000 mortgage products were subsequently withdrawn. Although mortgage pricing has since eased somewhat, particularly for first‑time buyers, this period has reinforced uncertainty across housing and lending markets that had otherwise been showing signs of improving activity.Despite these headwinds, the UK credit market continued to expand in Q1 2026. Lenders have so far shown limited signs of retrenchment in product availability, while consumer demand has remained relatively robust, particularly in unsecured lending. This degree of resilience is notable given the more challenging macroeconomic backdrop and points to the continued strength of consumer balance sheets alongside sustained lender confidence.While conditions are clearly becoming more testing, UK consumers have, to date, continued to demonstrate resilience, and we expect this to broadly persist. However, this resilience is unlikely to be evenly distributed. Certain cohorts are more exposed to rising living costs and tighter financial conditions, and we will continue to monitor indicators of emerging stress as the UK navigates a period of heightened geopolitical uncertainty.In this update, we therefore focus in particular on the mortgage market, reflecting both its sensitivity to macroeconomic developments and its central role in household finances. This focus is especially important at a time when consumers are more highly geared in unsecured credit than previously, meaning that shifts in employment conditions or borrowing costs could have a more pronounced impact. In an environment of softer wage growth and rising labour market uncertainty, close attention to early warning signals is warranted.Importantly, while the macroeconomic backdrop is weakening, it remains materially different from the conditions experienced in 2022 and 2023, when the war in Ukraine and the poorly received mini‑Budget triggered sharp spikes in inflation and energy prices. We do not expect a repeat of that scale or severity, though meaningful headwinds remain, including a loosening labour market and continued pressure on households from rising essential expenditure. “The economic backdrop is undeniably challenging, yet Experian data shows credit markets remain robust, showing that resilience has been embedded into both consumer behaviour and lending strategies”David Kerry, Director of Data Insight. Key findingsScroll down to find out more about the latest affordability and credit trend updates or click on a category below to review. Unsecured LendingDemand Holds Firm Despite Mounting HeadwindsUnsecured lending continues to demonstrate resilience, with strong demand across credit cards, personal loans, buy now pay later (BNPL) and retail finance despite a weakening macroeconomic outlook. Eligibility search volumes remain elevated, pre‑approval rates are stable or improving, and lenders are continuing to support growth rather than retrenching. Auto FinanceCredit Normalisation is Driving Higher LeverageConsumer Borrowing has risen as credit markets have reopened post-pandemic, especially in unsecured products. Underserved groups, returning borrowers increased product availability and innovation. For some, this can also lead to a greater need to borrow. Mortgages OutlookGeopolitics and Rates Cool Confidence, Not ResilienceMortgage sentiment has softened amid economic uncertainty, with lending down 12% year to date, partly due to last year’s stamp duty surge. Risk is focused on 3.3 million borrowers rolling off fixed deals; while payment rises are lower than in 2022–23, higher debt levels may reduce resilience, though most are expected to cope, with 3.08% forecast to deteriorate. Delinquency RiskPerformance Softens but Remains PredictableAcross unsecured products, delinquency emergence has edged up as lenders extend further into higher‑risk segments. However, performance remains risk‑aligned and well understood, with no signs of systemic deterioration. About the Experian affordability and credit updateThis update is based on real Experian data, rather than outputs from analytical or predictive models. By avoiding extrapolation, we can provide the most unbiased view of affordability, credit and consumer trends possible at a given point in time.As a leading UK credit reference agency, we have access to rich financial data covering individuals and households across the UK, putting us in a unique position to analyse and interpret the impact of rising societal costs or financial market changes on consumers and lenders. Unsecured LendingGrowth Accelerates as Demand Diversifies Across Risk and Demographic SegmentsCardsCredit card demand continues to demonstrate resilience, with the volume of eligibility searches remaining above last year’s levels despite ongoing geopolitical headwinds. Demand is increasingly being driven by high- to mid-risk consumers, alongside a noticeable shift toward younger age groups, cohorts that may once have been excluded from credit markets. Eligibility journeys make it easier for consumers to find the most appropriate product for them, reinforcing their role in enabling greater financial inclusion. On top of this, despite the widening of risk and uncertain economic backdrop we have not seen any meaningful change in product offerings from lenders. Availability, terms and pricing remain stable, notably with consumers still able to access long term balance transfers offers.Lenders are continuing to respond to this demand, with credit card new lending volumes up 13% year to date as of March 2026. This growth has been driven both by lenders flexing risk strategies to widen access for higher‑risk consumers, typically through lower initial credit limits, and by strong demand at the prime end of the market, where features such as rewards propositions are driving adoption. We have also seen lenders expanding more into open market. In 2025 34% of cards were opened by existing consumers, down from 44% in 2024, showing this market remains highly competitive and is yet to be deterred by macro conditions.Alongside an opening of risk, we have also seen an increase in lines being offered across the risk spectrum, with the most pronounced rises observed within mid-risk segments. At the same time, monthly credit card statement balances have continued to climb, with total balances now reaching £75 billion. This represents an increase of £25 billion from the post-pandemic low, when many consumers reduced debt during lockdowns, and places balances approximately £9 billion above the January 2020 pre-pandemic peak. Even after adjusting for inflation, real growth stands at a notable 15%, underscoring how embedded credit usage has become as markets have recovered.Consumers also remain highly engaged with monthly active usage of credit cards rising, driven by improved diversity of product features and ever-expanding rewards propositions. Ten million cards were issued in 2025, however, with this unprecedented growth there has also been a rise in the volume of dormant credit cards. While overall spend has increased and in fact actual dormancy rates have reduced, engagement is not uniform across portfolios. This likely reflects the volume of new cards opened over the past year as consumers increasingly hold multiple products and deprioritise older accounts, with fewer features. Dormancy rates vary materially by lender, ranging from below 1% to as high as 33% so lender success relies heavily on product innovation, precise consumer targeting and strong customer management frameworks.Notwithstanding higher dormancy levels, consumer appetite for credit remains strong. Across all demographics, consumers continue to actively seek out rewards and balance transfer offers, highlighting an ongoing willingness to engage with credit products despite broader economic uncertainty. Credit card new lending volumes: Indexed to Jan 24Figure 1 – Credit card new lending continues its record-breaking growth, up 13% year to date. Building on these trends, the flexing of risk policies continues to feed through to credit performance metrics. Delinquency emergence at both three and twelve months on book has edged up, reflecting the increased exposure to higher-risk lending. These pressures are well understood and broadly expected, with delinquency patterns remaining closely aligned to risk profiles. Notably, performance within high‑risk segments has actually improved compared to last year, while a modest deterioration has been observed in the mid‑risk bands, largely driven by a greater volume of lending at the lower end of these segments.Collections entry rates have also increased, consistent with the riskier front‑book lending seen over the past year. Even so, the overall credit card market continues to demonstrate resilience, supported by strong demand, stable supply conditions, and lenders’ active portfolio management.Given the evolving macroeconomic backdrop, this remains an area of close focus, particularly as cost‑of‑living pressures persist and affordability constraints tighten for some consumers. However, it is worth noting that during similar shocks in 2022/2023, UK consumers showed a meaningful degree of financial resilience. As such, while heightened monitoring is warranted, there is currently no expectation of a sharp or systemic deterioration in credit performance. Credit card new business performance at 3 months by credit score: Indexed to 2024Figure 2 – New business performance has improved in the high risk/low score consumers but shows slight deterioration in the mid-high risk LoansThe personal loans market continues to show comparable strength to credit cards. Eligibility search volumes are elevated relative to the same period last year, and pre‑approval rates have improved across the risk spectrum. Notably, almost half of all loan enquiries in March 2026 resulted in a pre‑approval offer, highlighting lenders’ continued appetite to support demand and showing that the personal loans market is catching up to the cards market in terms of inclusivity.Pricing conditions also remain supportive. Average APRs have stayed broadly stable, aside from some volatility within the highest‑risk segments, suggesting that neither lenders nor consumers are materially retreating from the market. Consumer engagement remains high and conversion rates have strengthened across the first three months of 2026, potentially driven by consumers striving to secure rates now while they remain competitive. This stability has underpinned a strong start to the year for new lending volumes, which are up 19% year to date. On top of this, average loan amounts have increased over the past 12 months, with the most significant growth occurring within higher‑risk cohorts. Personal loans new lending volumes: Indexed to Jan 2024Figure 3 – Lenders continue to meet demand with personal loans with new lending volumes up 19% year to date From a performance perspective, new‑business loan performance has softened, reflecting the higher proportion of riskier, lower value lending. However, outcomes remain largely predictable and aligned to risk. When segmented, the increase in risk emergence is more clearly concentrated within higher‑risk groups, suggesting that, relative to credit cards, the loans market is less effective at selectively targeting the strongest consumers within these bands.Collections entry rates have also risen in this market, in line with the riskier front‑book lending profile. That said, the average value of loans entering collections has declined since 2023, driven by a shift toward lower‑value lending, particularly within higher‑risk segments. Overall, while this remains an area of close monitoring for signs of unexpected stress, market conditions are currently stable and consistent with the risk being taken on and supply and demand remain robust. Personal loan new business performance at 3 months by credit score: Indexed to 2024Figure 4 – New business performance of personal loans has deteriorated since the opening up of the market. The high risk or low score segments have deteriorated the most. “What we’re seeing is not consumers pulling back but engaging differently. Credit use is broadening across age groups and risk profiles, with eligibility tools, rewards and flexible products playing a central role in how people navigate affordability in an uncertain environment.”Craig Lupton, Head of Consumer Insight. Retail finance & BNPLThe buy now pay later (BNPL) market continues to perform strongly, with new lending volumes showing consistent growth over the past three years. This sustained expansion underlines BNPL’s continued popularity as a convenient and accessible payment method, becoming further embedded within consumers’ day‑to‑day spending habits.While new account volumes have continued to rise, the average basket size of BNPL transactions has taken a slight dip. This could be seasonal but might also be an indication of usage on lower value items as product diversification continues, or consumers look to offset near term pressures using this flexible payment solution. Either way, the simplicity and speed of the digital journey have cemented BNPL as a default payment option within consumers’ virtual wallets.The retail finance market has staged a strong recovery, gaining momentum toward the end of last year and into early 2026. New lending volumes are currently up 11% year to date, supported by a particularly strong Christmas trading period, with positive momentum carrying through into the new year. Encouragingly, this growth has been accompanied by stable new business performance at both three and twelve months on book. Collections entry rates have also remained steady and have improved compared with 2023, suggesting that, to date, the retail finance market is expanding in a measured and cautious manner. Auto FinanceResilient Growth Amid Policy, Cost and Regulatory PressuresThe UK auto finance market is increasingly shaped by policy and macro volatility, with geopolitical tensions driving fuel prices higher and accelerating the shift towards electric vehicles, while simultaneously increasing cost pressures across the automotive supply chain.Regulatory developments have further contributed to market uncertainty, particularly around discretionary commission arrangements. These issues have introduced additional instability for lenders but also underscore the importance of robust data and governance. Experian is well positioned to support the forthcoming redress scheme, leveraging our single customer view and data expertise to help lenders accurately identify qualifying agreements.Despite these headwinds, market activity has remained resilient. The March 2026 registration peak slightly exceeded last year’s levels, with new auto finance agreement volumes up 4% year to date. Credit performance has also strengthened, with continued improvement observed at both three and twelve months on book, alongside stable rates of accounts entering collections.In parallel, forbearance activity has increased since early 2025, with a growing proportion of collections stock being moved on to arrangements. Importantly, the success rates of these arrangements have remained steady, suggesting that the shift in collections strategies across the market is proving effective and is helping more consumers navigate periods of financial difficulty.Overall, while uncertainty continues to surround the auto finance sector, the market remains robust, characterised by moderate but sustained growth and improving performance indicators. Auto finance new lending volumes: Indexed to Jan 2024Figure 5 – The Auto Finance market has seen a strong new registration month in March 2026 and is currently up 4% year to date Mortgages OutlookNavigating Affordability and UncertaintyThe UK mortgage market is shaped by a combination of global and domestic economic pressures, creating a more challenging environment for households. Ongoing conflict in the Middle East has contributed to renewed inflationary pressures, with higher global energy prices expected to feed through to household bills as the Ofgem price cap rises in July. Consumers are already experiencing higher petrol and diesel prices, adding to near‑term cost pressures and uncertainty.Against this backdrop, the Bank of England’s unanimous decision on 19th March to hold the base rate at 3.75% marked a shift in market expectations following the easing cycle initiated by the Monetary Policy Committee (MPC) in August 2024. While the policy rate itself was unchanged in March, lenders responded promptly to the decision and to broader signals by repricing mortgage products, with rates edging higher and a number of offerings withdrawn. These developments have contributed to a more cautious tone across the market and underscore the sensitivity of mortgage affordability outlooks to shifts in the wider macroeconomic environment.As a result, confidence in the mortgage market has softened, with impacts visible across both purchase and remortgage activity. Mortgage new lending volumes are down 12% year to date, although these figures are heavily influenced by the surge in activity seen ahead of the April 2024 stamp duty changes. Even so, broader macroeconomic narratives and uncertainty have clearly weighed on sentiment.While these pressures affect all borrowers, the group most exposed to potential affordability shocks is the 3.3 million consumers holding approximately 2.2 million mortgages that are due to roll off fixed‑rate deals over the next six months. Inevitably, comparisons are being drawn with the 2022/2023 period, when the Russian invasion of Ukraine and the mini‑budget triggered a sharp acceleration in inflation and therefore bank rate and mortgage pricing. Although mortgage rates have risen following recent geopolitical developments, the current environment is materially different. Rate increases have been more moderate, suggesting that the scale of the affordability shock this time is likely to be less severe, and in fact some lenders have even begun reducing rates in April.During the 2022/2023 cycle, many borrowers transitioned from mortgage rates below 2% to rates exceeding 5%, resulting in a significant step‑change in monthly repayments. By contrast, mortgage rates have largely remained within a 4% to 5% range over the past three years. This has helped to dampen the impact of refinancing for many borrowers, and for some, affordability may even improve when rolling onto a new deal. Average mortgage ratesSource: Bank of EnglandFigure 6 – Average mortgage rates rose sharply in 2022 and into 2023 but have been stable for the past 2 years. Source: Bank of England Historical experience also points to a strong degree of consumer resilience. Between September 2022 and December 2023, around 2.6 million mortgages moved onto higher rates, leading to an average monthly payment increase of £250, broadly in line with our previous forecast of £286. Despite this, only 3.04% of borrowers moved from being fully up to date to missing one or more payments in the subsequent 12 months, and just 1.26% of mortgages entered arrears.While this compares with a lower bad rate of 0.75% across the wider mortgage population at the time, it nonetheless highlights that widespread deterioration was limited. APR shift for the 2022/2023 roll off populationFigure 7 – For the cohort of consumers that rolled off in 2022/2023, the APR jump was much more significant than what is expected today Stress during that period was concentrated among borrowers with the highest debt‑to‑income (DTI) ratios, although those with DTIs below 50% performed better than the UK average. For the upcoming cohort of around 2.2 million mortgages, the expected increase in monthly payments is lower than in the previous cycle. However, consumers are now committing a higher share of their income to credit repayments, which may marginally reduce resilience compared with 2022/2023.This increase in leverage reflects broader changes in consumer behaviour. There are now around 1.5 million more consumers holding some form of debt compared with 2023, and over 20 million consumers are repaying credit commitments equivalent to up to 10% of their monthly income, approximately half a million more people. This higher indebtedness has been driven by the growing normalisation of credit as markets recovered, particularly within unsecured lending. Consumers are increasingly comfortable holding debt across a wider range of products, using them for different purposes, from benefits‑driven spending such as rewards, to active financial management through competitive balance transfer offers. The growth of BNPL has further expanded consumers’ ability to use credit in ways that align with their needs and preferences.Based on the current DTI profile of borrowers due to roll off their fixed rate deals and observed performance during 2022/2023, we estimate that around 85K consumers may experience deterioration following upcoming mortgage roll‑offs. This equates to a projected bad rate of 3.08%, only marginally higher than the 3.04% seen previously, indicating that overall consumer resilience is likely to remain broadly consistent. Debt to income ratio of current roll off cohort v previous (2022/2023)Figure 8 – The current roll off cohort are slightly more indebted than the cohort that rolled off back in 2022/2023 While the mortgage market has been the most exposed to the external economic pressures discussed, this has so far manifested primarily in reduced new lending volumes rather than worsening credit performance. Delinquency levels remain low, suggesting that, despite tighter conditions, borrowers continue to demonstrate a meaningful degree of financial resilience. “The data suggests upcoming affordability pressures caused by higher mortgage rates are likely to result in a similar impact to the 2022/2023 cycle, where consumers proved resilient. While households are now more highly geared and have thinner savings buffers, this is offset by much more modest rate increases.”Hannah Lloyd – Senior Data Analyst. How can Experian help?With our rich breadth and depth of data on consumers across the UK, we empower lenders to optimise new lending decisions and uncover growth opportunities with the right risk-aligned customers.What’s more, we can help organisations to understand each consumer’s individual financial circumstances, verifying their income, employment and expenditure to ensure products and services are right for them, today and in the future. 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