Consumer finance new business grew by 1% in September 2021

New figures released today by the Finance & Leasing Association (FLA) show that consumer finance new business grew by 1% in September 2021 compared with the same month in 2020. In the nine months to September 2021, new business was 13% higher than in the same period in 2020.

The credit card and personal loan sectors together reported new business up by 25% in September compared with the same month in 2020, and growth of 12% in the nine months to September 2021. The retail store and online credit sector reported new business up by 1% in September compared with same month in 2020, and growth of 9% in the nine months to September 2021. 

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

“Some consumer finance sectors continued to report strong growth in September as they recover from the pandemic, but ongoing supply chain issues adversely affected the car finance market and slowed growth overall.

“The squeeze on household incomes from higher inflation (primarily driven by rising energy prices) and higher taxes is expected to weigh on consumer spending over the next year. It is not surprising that the Bank of England has refrained from raising interest rates at this time given that it expects the higher rates of inflation to be temporary and does not want to derail the recovery in the UK economy.

“Our latest research suggests that the industry has maintained its optimism about the opportunities for growth despite the risks to the recovery from supply chain disruption, higher inflation and further waves of Covid-19. The FLA’s Q4 2021 industry outlook survey shows that 88% of consumer finance providers expected new business growth over the next twelve months.”

 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 2020, FLA members provided £113 billion of new finance to UK businesses and households. £86 billion of this was in the form of consumer credit representing over a third of total new consumer credit written in the UK in 2020.
3. Consumer motor finance reported in these figures refers to finance obtained through the point of sale.
4. The FLA Q4 2021 Industry Outlook Survey results may be found here.
5. For media enquiries, please contact the FLA press office on 020 7420 9656.