Navigate page Get in touch Overview Cards Loans Retail finance How can we help? Get in touch Affordability and credit updateAutumn 2026Credit Landscape: Data-driven insights into consumer trends and affordabilitySince our previous update, higher energy prices and an escalation of international tensions have renewed pressure on household finances. Following the 13% increase in the energy price cap in July, another 3.6% rise is set to take effect from October, taking the typical annual bill to £1,723, with a further rise expected in January 2027. Driven by rising fuel prices, CPI inflation rose to 3.1% in August, its highest reading in five months. While conditions remain far removed from the peaks of the 2022 energy crisis, higher essential spending continues to squeeze disposable incomes, particularly for lower-income households.The wider economy has, however, proved more resilient than initially anticipated, avoiding the sharper slowdown expected earlier in the year. The Bank of England held Bank Rate at 3.75% again in September, with the MPC voting 6-3 to maintain the current rate. Amid these renewed pressures, borrowing costs are likely to remain elevated for longer, continuing to weigh on affordability for both prospective and existing homeowners. With gilt yields and government borrowing still elevated, fiscal flexibility remains limited ahead of the Government’s Autumn Budget on 28 October.At the same time, a softer labour market is adding to affordability pressures. Vacancies have fallen to their lowest level since early 2021, and real pay growth remains subdued. Youth unemployment is elevated, and the number of young people not in education, employment or training (NEETs) remains close to recent highs, making it harder for younger households to absorb higher living and borrowing costs.Nevertheless, credit markets remain resilient. Demand continues to be supported by credit availability, lender appetite remains healthy and the major lending markets covered in this update continue to grow. While early signs of pressure are emerging, these remain concentrated among younger and lower-scoring consumers rather than pointing to widespread financial stress.In this update, we explore how these changing economic, employment and credit conditions are shaping household affordability, and where the data suggest pressures may emerge next.“Household budgets are under renewed pressure, yet credit markets remain resilient and every major lending market is still growing. The test over the coming year is whether that resilience holds as the labour market softens.”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. CardsCard demand remains healthy as the market mix shiftsCard demand remains strong whilst origination volumes have begun to normalise after a period of record-breaking account openings. While recent lending accounts for most of the rise in delinquency, back-book performance is an area to watch. LoansLoan growth remains strong despite a changing demand mixDemand remains healthy and lender confidence strong, with new lending up 15% year to date. Delinquency remains elevated, but is largely being driven by recent lending into higher-risk segments. Retail Finance & BNPLRetail finance continues to grow without deterioration in qualityRetail finance has grown 10% year to date, supported by a broader range of providers and propositions. Despite this expansion, collections entry rates and new business performance remain steady. MortgagesMortgage lending remains resilient as growth softensMortgage lending remains in growth at 3% year to date, despite volumes falling back to 2024 levels in the most recent month. Delinquency remains low and stable, with collections entry rates falling back to 2022 levels. 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. CardsAt a macro level, cards eligibility search traffic has held broadly steady, and the market has grown on every measure.Consumers opening cards rose 21% between 2023 and 2026, balances 27% and credit limits 19%. Demand is therefore healthy. What has changed is where that demand sits, and the driver is behavioural as much as it is compositional.Prime consumers are markedly less likely to return to market than non-prime consumers.Among super prime consumers who last opened a card two to three years ago, the share returning within twelve months has fallen from 15.0% to 11.5%, while every non-prime band has moved the other way, with high risk return rates rising 10 to 13 percentage points. Non-prime consumers tend to come back repeatedly, opening further accounts in pursuit of a total credit line they are satisfied with, whereas prime consumers are typically served in one visit.Relaxed lender risk policy has amplified this. Far more non-prime consumers can now access credit than ever before, with high-risk penetration up 16.4 percentage points in three years and the number of high-risk consumers opening cards up 124%. Combine that volume with their higher propensity to return and non-prime activity pulls the centre of new lending downwards, irrespective of prime appetite. There may also be routes to credit that suppress prime visibility in search data.Credit card enquiries by risk groupFigure 1 – Card eligibility enquiries have held steady overall but have changed in composition. The strongest growth has come from the highest risk consumers (up to 780) and has fallen in the lowest risk (1011+).New lending overall shows a slowdown in the rate of month-on-month growth, consistent with the compositional changes highlighted. The market remains firmly in growth though, still in double digits, but the magnitude has eased from 12% month on month at the start of 2026 to 8% in June. Taken together with the mix shift, continued softening through the near term is expected, while growth remains the central forecast. The more likely interpretation is a normalisation of volumes toward a more sustainable, though still impressive, level rather than a genuine downturn.Alongside this, there are more cards in circulation than ever, and card spend has grown consistently for three years, sitting firmly above pre-pandemic levels. Statement balances currently stand at £75bn, 11% higher than a year ago, with balance growth continuing to outpace payment growth, which has risen 8% over the same period. Despite £25bn being paid off, consumer spend maintains its upward trajectory.Decomposing the 11% year-on-year shows promotional-rate balances contribute +12% to growth while non-promotional balances contribute -1%, showing the rise is driven almost entirely by growth in rewards cards and balance transfer products rather than by consumers accumulating expensive revolving debt. A consequence of higher promotional rate spend is an increase in minimum payment behaviour, most visible among younger consumers where the proportion of under-25s making minimum payments has risen 1.2% on last year. The 55-64 cohort has moved in the opposite direction, down 1.8%. % Change in proportion of minimum payers May 2026 v May 2025Figure 2 – The percentage of under 25 card holders making minimum payments has risen the most over the course of the 12-month period than any other age cohort.Turning to performance, new business delinquency emergence at three months on book shows a continued rise in the proportion of accounts going on to miss payments, with the trend now above pre-2020 levels. This is driven by lenders’ ongoing expansion into higher-risk segments. Importantly, while the trend is climbing, it is consistent with what we would expect given the lending that has been written, and at this stage there is no evidence of break-out consumer stress. Similarly, the month-on-month rate of accounts entering collections remains elevated, with newer lending accounting for approximately 75% of the deterioration, making recent, higher-risk origination the primary driver. The remaining 25% originates from back-book accounts, which does point to some weakening that lenders should monitor closely.That back-book weakening is not evenly distributed, however, and varies considerably by sector. Banks have seen a starker deterioration than non-bank providers, with the back book accounting for 43% of the deterioration compared with 25% across the market as a whole. Two factors are likely to be contributing. Bank expansion into higher-risk lending came later and was less aggressive than that of other providers, leaving them with less high-risk new business exposure to drive the front-book share. Banks also hold larger back books by definition, so the front book will naturally make a smaller proportional contribution. Both explanations are therefore compositional in nature, which tempers the immediate concern. Nonetheless, this remains an area warranting close monitoring, as consumers are more highly indebted than ever and are consequently more sensitive to changes in the economic backdrop.Overall, the market continues to operate strongly and has proven resilient against a shifting economic and geopolitical backdrop. Back-book performance is the one area warranting closer attention, but on the whole, there is no indication that this market will struggle in the near term.“Banks are seeing 43% of their collections deterioration come from the back book, against 25% market-wide. Most of that gap is compositional, but it’s still the number worth watching.”Hannah Lloyd, Senior Data Analyst LoansMirroring the pattern seen in cards, the loans market has experienced a similar but less pronounced change in consumer mix. Enquiry volumes from consumers in the highest risk groups have risen 20%, coupled with a 3% drop in volumes from those in the lowest risk groups. Loans demand therefore remains healthy and ahead of 2025 levels, but the type of consumer coming to market is changing. On the supply side, pre-approval rates remain stable, with a slight increase in the latest data point, and loan pricing remains resilient. Together these indicate that supply conditions have not changed and lender confidence remains strong.In terms of new lending, there has been a small softening in month-on-month growth nevertheless, year-on-year performance is strong with the market currently up 15% year to date and further growth anticipated.Loan delinquency rates tell a similar story to credit cards, with delinquency emergence at three months on book remaining elevated, driven by expansion into higher-risk tiers. Collections entry rates are also rising, though 92% can be attributed to riskier front-book lending, meaning back-book risk emergence is far less pronounced here than in cards.One important caveat is that the credit card market tends to be more reactive to market changes, with loans typically lagging behind. The deterioration in back-book performance observed in cards could therefore follow in loans in due course. Overall, however, the market maintains positive sentiment, underpinned by double-digit year-to-date growth, strong demand and confident lenders. Personal loans new lending volumes: Indexed to Jan 2024Figure 3 – Personal loan new lending volumes remain in growth (+15% YTD) but MoM growth has slowed slightly. Retail finance & BNPLThe retail finance market has seen growth of 10% year to date and, despite this continued expansion, collections entry rates and new business performance remain steady pointing to a market growing without any accompanying deterioration in quality. A considerable proportion of this growth is attributable to a broadening of supply beyond specialist providers. Mainstream banks have entered the space with new point-of-sale finance propositions, while established providers have expanded their product suites, introducing credit card-style payment options that offer consumers greater flexibility.BNPL continues to perform extremely well in terms of new lending volumes. While this market has been growing in popularity across both the risk and age spectrum, arrears at three months on book have risen. There has been a step change in risk appetite across the BNPL market that coincides with the inflection point in the delinquency emergence trends. This shift has pushed lending further down the risk spectrum into higher-risk bands, but deterioration is also evident within band. The increase in risk is therefore expected and remains aligned to expectations, rather than evidence of consumers turning to BNPL out of financial necessity. This comes at a time when new FCA regulations came into force in the market on 15 July 2026. These rules bring BNPL providers under the same standard consumer credit rules as other markets, meaning lenders must now evaluate whether credit is affordable before approval. Consumers consequently receive the same level of protection as they would when using other forms of credit and will experience a more transparent checkout process (FCA).It remains too early to measure the impact these changes have had on the market, and the impact of the regulation will vary on providers subject to how advanced they already were on the regulatory requirements.MortgagesSecured lending remains resilient on the whole, despite the macroeconomic and political uncertainty currently being experienced. Mortgage new lending volumes have fallen back to 2024 levels in the most recent month, though the market remains in growth at +3% year to date. The Bank of England’s decision to hold bank rate at 3.75% means mortgage rates are currently stable; however, the fact that rates were held rather than reduced reflects the Bank’s “watch and wait” stance on issues such as the ongoing conflict in the Middle East.As the mortgage market is the most sensitive of the credit markets to sentiment and given the unstable nature of today’s economic and political backdrop, it is possible that growth here could continue to soften.Mortgage delinquency levels, by contrast, remain low and stable. Collections entry rates sit below where they were in both 2023 and 2024, having fallen back to 2022 levels.How are consumers utilising their unsecured debt?For 18 months now, the unsecured space has delivered growth of a magnitude not previously seen. It is therefore pertinent to investigate what consumers are doing with unsecured credit once they open it in order to understand the underlying drivers of that growth. In October 2025, 1.4 million consumers opened an unsecured product (a credit card, personal loan and/or revolving retail finance agreement). Tracking those consumers’ progress over the subsequent six months reveals that the largest proportion, at 37%, can be classed as “debt builders” (consumers who increased their total unsecured balance by more than 10% over the period). This means they opened their product in October and built an active balance on it whilst also maintaining or building balances on their other pre-existing unsecured products, thus adding more active credit to their wallet. The second largest group, at 29%, are “debt builders and expanders”, behaving like debt builders, but additionally opening further lines of unsecured credit over the 6-month outcome period.Type of unsecured borrowers in October 2025 (six month outcome)Figure 4 – 66% of consumers who opened unsecured credit in October 2025 built debt in some way (debt builder + debt builder and expander).#Comparing this population against previous cohorts from 2023 through to 2025 shows that the proportion fitting the “debt builder and expander” profile has been increasing, in line with lenders’ expansion into higher-risk segments. This has occurred alongside a reduction in the proportions of both “debt builders” and those maintaining “status quo”, where total unsecured debt remained within 10% and no new accounts were added, highlighting that credit is now more readily available to consumers. Those who build debt and open further credit exist across the risk spectrum but carry a lower average credit score than those who build debt alone and tend to be younger.Proportion of borrower types by new lending monthFigure 5 – The proportion of consumers who open unsecured credit and build debt whilst continuing to open further credit has grown over the 3 observation points.Several factors explain this increased accessibility. Improvements in eligibility journeys mean consumers are shown the right product for them almost instantly, without having to go looking for it. The unsecured market also remains a highly competitive space, where new and enticing products, rewards propositions in particular, attract greater consumer interest. Layered onto this, the expansion into higher-risk segments means consumers are simply more able to access credit than before and are consequently in a position to expand their wallet and build debt.Performance at the six-month mark shows that consumers who built debt are more likely to miss payments than those who maintain their status quo or use new credit to reduce existing borrowing.The significance of this lies in resilience. Debt building and wallet expansion are in themselves signs of a healthy, accessible credit market, but the cumulative effect is that consumers hold more unsecured debt across more active accounts than at any point in recent years, leaving less headroom to absorb an unexpected change in circumstances. That matters because the fastest-growing group maps closely onto the population most exposed elsewhere in this update: debt builders and expanders are younger and lower-scoring, the same cohort facing youth unemployment of 16.2%, the highest concentration of short-term AI displacement risk and the sharpest rise in minimum payment behaviour. Should this cohort experience a shock of some kind, the effects would be felt faster and more acutely than in previous cycles, simply because there is less slack in the system. The window for identifying vulnerability is therefore now, while these consumers are still performing, rather than after a shock has worked through to arrears.“Two-thirds of consumers who opened unsecured credit last October went on to build debt. That isn’t distress today, but it does mean households have less room to absorb a shock.”Craig Lupton, Head of Consumer Insights The backdrop to lending and consumer affordability is constantly changing, now more than ever. Whether politically, economically or technologically, it is always shifting, and this poses risks to both consumers and lenders. One of the most significant technological changes of recent years is generative AI which, while being a major driver of innovation, carries both near and long-term employment risks for the UK population. Experian’s economics team predicts that 1.6 million UK consumers live in households with a strong short-term likelihood of unemployment as a result of AI developments (approximately 3% of UK adults), while 8.7 million consumers live in households with a strong long-term risk of AI displacement (around 15% of UK adults).In the short term, it is likely to be younger, near- to sub- prime consumers who are impacted most significantly, as these consumers are more likely to hold junior roles which are most at risk of AI automation. This exposure is expected to spread to the older and more affluent population over the longer term as AI developments accelerate. Context matters here: the UK unemployment rate currently sits at 4.9% and has been gradually rising over the last three years. Job loss is a very significant stressor and one of the leading reasons consumers begin to fall behind on credit commitments. The 1.6 million consumers who are highly exposed in the short term hold more than 5 million open credit commitments, with credit cards and current accounts the most exposed products at present. Moving to the longer-term outlook, as the impact is felt among older and more prime cohorts, mortgages enter the top two products by exposure. Lender exposure varies widely, ranging from 1–10% in a single market when looking at short-term risk, and 8–35% when looking at long-term risk. AI-driven employment disruption therefore represents a significant emerging structural risk, and one lenders should monitor closely to ensure consumers receive the help they need before they begin missing payments on their most crucial assets. In short, this is not a risk that will announce itself in the credit data until it is already a collections problem, which makes proactive identification, rather than reactive treatment, the differentiator. Experian’s Cost of Living flags, available through the Ascend platform, cover AI unemployment as well as a whole host of other stressor characteristics and so can help proactively identify consumers who may need extra support.Consumers in households with high AI displacement risk Age PenetrationFigure 6 – In the short term, younger consumers are most likely to feel the impact of AI developments on unemployment. This spreads to older consumers in the longer term.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. We believe data has the power to change lives.With better, more informed data we can support your business to grow and help you to drive better outcomes for your customers. Find out more about:Affordability insightsReveal more about a consumer’s financial health. Open banking insightsHelping lenders to verify and monitor financial wellbeing to take action quickly. Digital PayrollReducing risk of payslip fraud by using verified income and employment verification data directly from source. 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