Latest news with #financialrules
The Sun
5 days ago
- Business
- The Sun
Huge buy now, pay later update for millions as major rule change to kick in – what it means for shoppers
HUGE changes are coming to popular buy now, pay later (BNPL) schemes, with new rules set to kick in next summer. The government has now legislated to bring these interest-free payment plans, officially termed "Deferred Payment Credit" (DPC), under the financial watchdog's rule. 1 The shake-up, first revealed by The Sun in October 2024, will come into force on July 15, 2026 and will protect shoppers and enforce stricter rules. Under new rules proposed by the Financial Conduct Authority (FCA) today, lenders will have to check if borrowers can afford repayments and help them out if they run into financial trouble. Borrowers will also be able to file complaints with the Financial Ombudsman Service. BNPL products are a way for people to spread the costs of purchases without paying interest. But BNPL providers have operated largely outside strict financial rules, unlike traditional credit cards or loans. Concerns have been raised that some people could end up taking out loans that they cannot afford to pay back on time, incurring charges. According to the FCA's research, one in five UK adults – around 10.9million – had used BNPL at least once in the 12 months to May 2024, up from 17% in 2022. In May 2024, 2% of UK adults (1.1million) had £500 or more outstanding unregulated BNPL debt, while 11% (5.3million) had £50 or more outstanding, the regulator found. The FCA's consultation on BNPL rules, is now inviting feedback from lenders, consumer groups, and others until September 26, 2025. The final rules will be decided next year. Firms will have six months from the date the regime comes into force to apply for full authorisation. Sarah Pritchard, deputy chief executive at the FCA, said: "We have long called for BNPL products to be brought into our remit, so people can benefit from BNPL while being protected. "Our regulation will help consumers navigate their financial lives, with checks on whether they can afford to repay, support when things go wrong and access to the right information to make informed decisions." Debt charities and consumer rights groups have welcomed the news. Vikki Brownridge, chief executive of StepChange Debt Charity, said: 'It's incredibly reassuring to see the FCA's consultation on its proposed approach to regulating buy now, pay later. 'Whilst BNPL can be a useful budgeting tool, it can deepen debt problems, and it is important struggling consumers are afforded the same level of protection as for other forms of credit." Vix Leyton, a consumer expert at app ThinkMoney, added: "Proper affordability checks, in line with other credit products, are vital to stop people unintentionally kicking the financial can down the road, as is making sure that those in financially vulnerable positions understand the consequences of missed payments." Both Klarna and Clearpay support the measures. What will the new rules mean for shoppers? If a product or firm is regulated, it means that customers are covered by certain protections if they are treated unfairly or something goes wrong with their product or service. Firms will have to carry out strict affordability checks First and foremost, BNPL will be required to properly check if you can truly afford to repay a loan. This means no more easy credit for those who might struggle. The goal is to make sure BNPL lending is always affordable. BNPL providers aren't currently required to carry out such stringent checks, although some firms, like Klarna, have introduced them voluntarily. Customers will need to be properly informed This means you'll get much clearer information before you hit checkout. Before you commit to a BNPL agreement, companies will have to proactively give you essential details. This includes the 0% interest rate, the exact credit amount, the number and frequency of payments, and the cost of each payment. Crucially, they'll have to spell out the consequences of missed payments, including any charges and how it might impact your credit score. This will ensure you make an informed decision. If you hit a rough patch and miss a payment, the BNPL provider will also be required to act fast. They'll have to notify you as soon as possible, clearly stating any unpaid sums, including late fees. They also must provide information on how to avoid further problems and offer support. Firms are expected to treat customers in financial difficulty with "forbearance and due consideration". This includes guidance on managing your finances and access to free debt advice. Shoppers will be able to complain to the Financial Ombudsman Service Shoppers will soon be able to take complaints about BNPL firms to the Financial Ombudsman Service (FOS). Currently, BNPL users can't escalate issues to the FOS, which helps resolve disputes between consumers and regulated financial firms. Under the new rules, if you're unhappy with how a BNPL company handles your complaint, you'll be able to take it to the independent FOS for a fair and impartial resolution. This gives shoppers a stronger way to settle disputes if things go wrong and fight for compensation if they've been wronged. Shoppers will be able to return items for a full refund if they are faulty or were mis-sold Proposed changes will also bring BNPL products under Section 75 of the Consumer Credit Act, giving shoppers crucial protections. Currently, BNPL users may struggle to get refunds or replacements for faulty items, as these protections don't apply. Under Section 75, if you buy something costing £100 to £30,000 using BNPL credit and the goods are faulty, not delivered, or the retailer goes bust, the BNPL lender is equally responsible. This means shoppers can claim refunds, repairs, or compensation directly from the lender, even if the retailer is unavailable or out of business. How to get free debt help There are several groups which can help you with your problem debts for free. Citizens Advice - 0800 144 8848 (England) / 0800 702 2020 (Wales) StepChange - 0800138 1111 National Debtline - 0808 808 4000 Debt Advice Foundation - 0800 043 4050 You can also find information about Debt Management Plans (DMP) and Individual Voluntary Agreements (IVA) by visiting or Speak to one of these organisations - don't be tempted to use a claims management firm. They say they can write off lots of your debt in return for a large upfront fee. But there are other options where you don't need to pay.
BBC News
6 days ago
- Business
- BBC News
'The sums do add up' - Nevin on Chelsea's spending
The top Premier League clubs appear to have discovered some spare change down the back of their respective sofas.Chelsea, Liverpool and Spurs have spent big, as have Arsenal, making considerable improvements to their squads. So you should when you are splashing hundreds of millions of pounds appear to have finally figured out how the financial rules actually work regarding transfers. In summer 2024, they were desperately offloading talented, young, homegrown players at the last minute - sometimes to each other - just to somehow stay within the complicated guidelines. It all looks much less like that this summer so again there is Chelsea. Having been fined £27 million for overspending, they have since made £90 million out of their success in the Club World Cup and likely at least £50 million for next season's Champions League qualification. Suddenly, it all makes sense - those sums absolutely do add up!Others might think that is how you do it - but Nottingham Forest and Everton fans might warn them to be wary. Points deductions rather than fines can quickly change may think they are on top of everything but those rules are likely to change again very soon. It might be an idea to keep those creative accountants on speed up to read more from Pat Nevin in his Football Extra newsletter
Yahoo
16-07-2025
- Business
- Yahoo
The Money ‘Rules' That Sound Smart — Until You Look Closer
Financial rules are often just guidelines rather than strict standards, and they depend a lot on unique circumstances, including income, assets and financial goals. While you should never play too fast and loose with sound financial advice, there's often more gray area inside these rules than it seems at first glance. Check Out: Read Next: Finance experts explained which financial rules you can ignore, and when. There still may be a lot of wisdom tucked inside the rules, but there may also be room to break them … wisely. If you take a hard line that debt is always bad, you might miss out on some key financial opportunities, according to Taylor Kovar, CFP, founder and CEO at 11 Financial. 'Yes, toxic credit card debt and high-interest personal loans can wreck your finances, but not all debt is created equal,' he said. For example, a low-interest mortgage or business loan might actually be helping you build wealth. 'I've seen people delay growth opportunities because they were too focused on being 100% debt-free instead of strategically using leverage,' Kovar warned. Someone who has just gotten out of debt consolidation, on the other hand, might want to stick with a hard line 'debt is bad' strategy, at least for a good long time. Find Out: Another common rule is that you should pay off your mortgage as early as possible by making extra payments or making a larger mortgage payment each month so as not to accrue too much interest. Kovar said this rule is situational. If you've got a low fixed rate, paying extra toward your mortgage might not be the smartest use of your money, especially if you don't have solid savings or you're not maxing out retirement accounts. 'I'd rather see someone build a healthy financial cushion than tie up all their extra cash in a house they can't liquidate quickly,' he said. Kovar gave this one a hard 'nope.' Renting can give people flexibility, he pointed out, especially if they're not sure where they want to live long term or if the housing market is overpriced in their area. 'Owning a home comes with a lot of hidden costs — repairs, taxes, insurance — that people don't always factor in. Renting can be a smart move depending on the season of life.' Kovar has worked with a lot of families who aren't overspending, they're just under-earning or don't have a system that works. For them, budgeting isn't the answer to everything. 'Sometimes the stress isn't coming from the budget itself, it's from trying to manage everything manually without the right tools or support.' When the stock market makes wide swings, you often hear that you should wait for it to calm down before you invest money in it, but that's not always the best rule to follow, according to Robert R. Johnson, PhD, a chartered financial analyst and professor of finance in the Heider College of Business at Creighton University. There is always a reason not to invest in the stock market if you give yourself one, Johnson said, because stock market corrections and crashes are virtually impossible to predict. This is exacerbated by media fear mongering. 'The market prognosticators who gain the most traction are the ones who make the most outlandish predictions — either bullish or bearish. Many of these people are introduced as someone who predicted a previous market decline or rally. The fact is that many of these people also predicted crashes or rallies that didn't happen.' Johnson also finds that people are 'extremely risk averse and are overly cautious in their asset allocation' when it comes to investing and typically don't take enough risks. While you do have to balance your risk tolerance based on your age and your financial goals, he said, 'Counterintuitively, the biggest mistake many people make in investing is not taking enough risk.' He shared an adage often tossed around in finance circles, 'You can sleep well or eat well,' pointing out that, 'You will sleep well if you commit funds to low-risk investments like money market funds or Treasury bills, but your investments will not grow substantially and may even have trouble keeping pace with inflation. You will eat well by consistently investing in stocks.' While real estate is undeniably a good investment, Johnson said that using it primarily as a vehicle to wealth is 'overrated.' Once you factor into account routine maintenance, property taxes and other costs, 'residential real estate has not been a very efficient way to build wealth,' he said. Additionally, many people make the mistake of buying the most expensive house they can afford and become house poor. 'Overextending and buying a large home is a losing strategy. Their mortgage payments crowd out other investing activities.' Before you call him crazy, Johnson is not suggesting that anyone should not save for retirement, but that 'one should think about saving and investing money for retirement.' Saving alone won't get you to true financial security. 'Because of compounding, time is the greatest advantage of investing.' While you do want to develop the discipline to save early in life, you should jump on the investing train as early as you can, too. More From GOBankingRates 5 Types of Cars Retirees Should Stay Away From Buying This article originally appeared on The Money 'Rules' That Sound Smart — Until You Look Closer Error while retrieving data Sign in to access your portfolio Error while retrieving data Error while retrieving data Error while retrieving data Error while retrieving data
The Guardian
04-07-2025
- Business
- The Guardian
Chelsea, Aston Villa and Barcelona fined by Uefa over spending rule breaches
Chelsea, Aston Villa and Barcelona have been fined by Uefa for breaking financial rules. Chelsea have been hit with an unconditional €31m (£27m) bill but could face a further €60m (£52m) fine if they do not comply moving forward. Barcelona and Villa have been fined €15m (£13m) and €11m (£9.5m) respectively but are also at risk of further conditional penalties. The conditional fines for Chelsea (€60m), Villa (€15m) and Barcelona (€45m) relate to agreed plans across four-year, three-year and two-year periods respectively. Chelsea and Villa breached Uefa's football earnings and squad-cost rules (SCR), the latter of which limits clubs operating in European competition to spending 80% of their revenue on player costs. Villa face being fined €5m for every year they breach financial rules. A new three-year cycle commenced in 2024-25. Villa are confident they can absorb the fine and strengthen Unai Emery's squad this summer while agreeing to move in line with SCR. Villa and Uefa are understood to have agreed a 'glidepath' to meet their targets. Villa, who are also confident of avoiding a possible points deduction from the Premier League after moving to sell their women's team to comply with financial rules, are adamant they do not need to sell key players. The future of Emiliano Martínez, however, is uncertain, and while Villa are yet to receive a bid for the Argentina goalkeeper, they are braced for further interest in the 32-year-old, who is under contract until 2029. Chelsea, Manchester United and Atlético Madrid, are thought to hold an interest in the World Cup-winner. Reducing the wage bill is a priority for Villa. On Friday the club confirmed they have terminated the contract of Philippe Coutinho, who has signed permanently for Vasco de Gama, his boyhood club. Villa want to trim the squad and offload fringe players, with Kaine Kesler-Hayden joining Coventry in a £3.5m deal and Emiliano Buendia, Louie Barry and Alex Moreno also poised to depart. Lyon (€12.5m), Besiktas (€900,000) Panathinaikos (€400,000) and Hajduk Split (€300,000) have also been sanctioned by Uefa.
Daily Mail
04-07-2025
- Business
- Daily Mail
Chelsea and Aston Villa learn punishments for breaching UEFA's Financial Fair Play rules
Chelsea have been slapped with a €31million (£26.8m) fine by UEFA which could rise to €91m (£78.5m) if certain conditions are not achieved over the next four years after being found to have broken financial rules. European football's governing body announced on Friday that Chelsea had agreed to a settlement which will see them pay an unconditional fine of €20m (£17.3m) for not complying with their 'football earnings rule' which was assessed for the first time in the 2024-25 season. That could increase to €80m (£69m) if they do not comply with targets set by UEFA. The Blues will also pay a further €11m (£9.5m) fine for breaching the 'squad cost rule'. UEFA's CFCB First Chamber imposed the disciplinary measures against Chelsea, as well as issuing other various fines to Aston Villa, Hajduk Split, Barcelona, Lyon and Porto. Villa have also agreed to their own settlement of a €20m (£17.3m) fine, of which €5m (£4.3m) is unconditional, for failing to comply with the 'football earnings rule'. They too will pay a further €6m (£5.2m) for breaching the 'squad cost rule', which permits clubs to spend no more than a fixed proportion of their revenue on transfers and wages. Last season, that figure stood at 80 per cent. From the forthcoming campaign, it will be 70 per cent, presenting a further challenge for competing clubs. Villa's wages-to-turnover ratio was substantially higher as the club sought to reach the Champions League for the second successive season. The fine is about £9.5m, though it should be noted the club did comply with Premier League spending rules in their most recent accounts. Villa are confident the punishment will not affect their ability to invest in the squad this summer as boss Unai Emery tries to return his team to Europe's main club competition, after missing out narrowly last term. UEFA said: 'In assessing the clubs' compliance with the football earnings rule, the CFCB placed particular attention on transactions involving the sale of tangible or intangible assets, the exchange of players (so called 'swaps') and the transfers of players between related parties. 'Clubs were required to perform adjustments, as profits from such transactions cannot be recognised as relevant income according to the UEFA Club Licensing and Financial Sustainability Regulations: Edition 2024 ('Regulations').' UEFA added both Chelsea and Villa were found to have a reported squad cost ratio between 80 and 90 per cent, and reminded them that as from 2025, they will only be allowed to spend 70 per cent of their revenue on player-related costs.
