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United Kingdom (UK) Consumer Credit Market Key Trends in 2020 - Market Overview, Critical Success Factors, Market Share and Innovations

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  • 22 Pages
  • September 2021
  • Region: United Kingdom
  • GlobalData
  • ID: 5517712
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This report explores the key trends in the UK consumer credit sector in 2020, providing insight into supply and demand scenarios and the factors that drove these scenarios during COVID-19 and the majority of the year.

The economic crisis resulting from the effects of COVID-19 has significantly amplified the need for debt advice, but the availability of credit shrunk significantly among lenders throughout the majority of 2020. As a result, 2020 saw a staggering decline in gross advances in the sector. However, the industry is expected to see some rebound between 2021 and 2025, albeit at a much slower pace than pre-COVID-19 levels.


  • The coronavirus pandemic harmed credit card borrowing worldwide in 2020. But according to the data provided by the BOE, growth had already started to impact credit cards in the UK, as there were already signs of slowing growth. According to BOE data, the annual increase in credit card lending peaked at almost 10% in 2018, but it had more than halved to 4.5% by the start of 2020.
  • Although not an immediate threat, the availability and flexibility of alternative lending such as BNPL should concern credit card lenders. BNPL options in the market come as a potential threat to both traditional banks and neobanks in the future. Lenders should aim to innovate (with BNPL options and credit card rewards) faster and establish customer needs from the pandemic. The financial behaviors seen throughout the pandemic will likely continue in the future. Therefore, lenders must understand that the effects of the crisis will be felt for years to come.

Reasons to Buy

  • Identify factors affecting growth in 2020 in the consumer credit sector while looking at the BOE Credit Conditions Survey implications on supply and demand and examining the impacts of COVID-19 on UK consumers’ savings and debt levels.
  • Analyze expected CAGRs for 2021-25 for all lines of credit in the UK with further analysis on potential factors driving the growth
  • Highlights key innovations that launched in 2020 around new credit propositions.

Table of Contents

1. Executive Summary
1.1 Market overview
1.2 Prospects for niche sectors
1.3 Critical success factors
2. The impact of COVID-19 has significantly transformed the consumer credit market
2.1 According to The Publisher, gross advances declined in 2020
2.2 Market share
3. COVID-19 has significantly changed the growth prospects for the sector
3.1 In comparison to 2019, forecast growth has significantly declined across many lines of unsecured lending
4. Innovation
4.1 Koto launches concept for near-prime customers
4.2 Virgin Money launches its new but not innovative credit card initiative
4.3 Updraft launches to help consumers pay off debts
4.4 Zopa launches its first credit card during the pandemic
4.5 The rise of payroll APIs
5. Appendix
5.1 Methodology
5.2 Secondary sources
5.3 Further reading
  • About The Publisher
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List of Figures
Figure 1: Total consumer credit (£m) showed significant decline in 2020
Figure 2: The availability of unsecured credit to households declined in Q2 2020 but has showed signs of recovery since
Figure 3: After Q2 2020, the economic outlook started to improve in the UK
Figure 4: Default rates on credit cards and other unsecured lending showed improvement in Q2 2020
Figure 5: Demand for unsecured lending declined in Q2 2020 but has since seen significant improvement
Figure 6: Economy view - The Publisher UK’s Sentiment Tracker
Figure 7: The cost of borrowing has remained the same for smaller loans
Figure 8: Quarterly market share and forecasts for 2021 - personal loans
Figure 9: Quarterly market share and forecasts for 2021 - credit cards
Figure 10: Consumer credit advances - the growth rate declined in 2020
Figure 11: CAGR by line of credit, 2020-25f

Companies Mentioned

A selection of companies mentioned in this report includes:

  • Tesco Bank
  • Monzo
  • TSB
  • Virgin Money
  • HSBC
  • Barclays
  • Santander
  • Nationwide
  • Lloyds
  • Updraft
  • Koto