Consumer finance new business fell by 18% in December 2020

New figures released today by the Finance & Leasing Association (FLA) show that consumer finance new business fell in December 2020 by 18% compared with the same month in 2019, and decreased by 18% in 2020 as a whole.

The retail store and online credit sector reported new business 6% lower in December than in the same month in 2019, and fell by 5% in 2020 overall.  Credit card and personal loan new business together fell by 24% in December compared with the same month in 2019, and decreased by 22% in 2020 as a whole.

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

“Many Covid-19 restrictions remained in place during December disrupting the most important sales period of the year for retailers.  The strength of online sales during 2020 meant that the retail store and online credit sector recorded the smallest rate of contraction in new business last year.

“The vaccine rollout in the UK has improved the outlook for the UK economy in the second half of 2021.  More than two-thirds of consumer finance respondents to the FLA’s Q1 2021 Industry Outlook Survey expected some growth in new business over the next year if economic conditions improve.”

 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. FLA Q1 2021 Industry Outlook Survey Result may be found here.
5. For media enquiries, please contact the FLA press office on 020 7420 9656.