Consumer finance new business fell by 11% in October 2020

New figures released today by the Finance & Leasing Association (FLA) show that consumer finance new business fell in October 2020 by 11% compared with the same month in 2019, and decreased by 18% in the ten months to October 2020.

Consumer car finance new business by value and retail store and online credit each grew in October by 2% compared with the same month in 2019.  Credit card and personal loan new business together fell by 20% in October 2020 compared with the same month in 2019.

Commenting on the figures, Geraldine Kilkelly, Head of Research and Chief Economist at the FLA, said:

“Consumer confidence weakened as new restrictions were introduced in October to deal with the rise in coronavirus cases. This is reflected in weaker demand for consumer finance across most of the main products.

“The economic outlook has improved following the promised rollout of a vaccine before Christmas.  Our latest research suggests that consumer credit in the UK is expected to grow by 9% in 2021, following a contraction of 22% in 2020 as a whole.  New lending on credit cards is expected to grow by only 5% next year, with households more cautious about building up debt post-crisis.” 

Table 1: New consumer credit lending

 Note to editors:

1. FLA members in the consumer finance sector include banks, credit card providers, store card providers, second-charge mortgage lenders, motor finance providers, personal loan and instalment credit providers.
2. In 2019, FLA members provided £140 billion of new finance to UK businesses and households. £105 billion of this was in the form of consumer credit representing over a third of total new consumer credit written in the UK in 2019.
3. Consumer motor finance reported in these figures refers to finance obtained through the point of sale.
4. For media enquiries, please contact the FLA press office on 020 7420 9656.