Report
Q1 2026 Credit Industry Insights
UK Consumer Credit Market Grows on Strong Demand and Increased Competition Amid Shifting Risk Environment
Q1 2026 Report highlights include:
- Total outstanding consumer credit balances reached a new record high in Q1 2026, but consumers remain relatively resilient with the average debt to income ratio sitting at the lowest level seen in two decades
- Despite the pressures of the cost of living crisis, there are significantly fewer consumers in serious delinquency (90+ days past due) in Q1 2026 than there were in the same quarter pre-pandemic (Q1 2020)
- The UK trails developed country peers in the proportion of adult consumers participating in credit markets
- New credit card and unsecured loan openings continued to surge in the latest quarter, continuing a two-year trend of strong lender competition for market share and multi-digit originations growth
Research by TransUnion in the UK shows that the consumer credit market saw continued strong growth with rising outstanding balances, increased new credit issuance and expanded credit participation during Q1 2026, while the consumer delinquency rate rose only slightly compared to the same period a year ago.
The year also started with strong consumer optimism, with 47% of UK consumers feeling optimistic about the future of their household finances during the first quarter of 20261, the highest level seen since the beginning of the current high inflation environment which started four years ago. However, consumer financial optimism has since fallen to 44% in Q2 2026, largely due to the knock-on effects of the Iran conflict on energy prices and inflation2, alongside the already slowing economy and weakening labour market3.
1TransUnion UK Q1 & Q2 2026 Consumer Pulse Survey
2Interest rates and Bank Rate: our latest decision | Bank of England
3Vacancies and jobs in the UK - Office for National Statistics
“The UK credit market remained on a firmer footing than many might have expected during the first quarter of the year, given the persistent pressures of the cost of living crisis. Credit participation continues to expand slowly, with balances growing across most major products. Despite this, overall consumer credit health remains relatively stable, with a few early signs of stress emerging. Nonetheless, while growth opportunities remain, the market is likely to be somewhat cautious amidst uncertainty around the near-term inflation outlook, the softening labour market and the holding pattern on interest rates from the Bank of England.”
James O’Donnell, Director of Research & Consulting at TransUnion in the UK
About the UK TransUnion CIIR Report
TransUnion’s quarterly UK Credit Industry Insights Report (CIIR) provides a clear, data driven view of consumer credit trends across the UK. Drawing on TransUnion’s robust national credit database, the report tracks key indicators of consumer behaviour and aggregate market movements across mortgages, credit cards, personal loans, motor finance, retail finance and overdrafts. The report focuses primarily on three dimensions across originations (new credit accounts opened), balances (outstanding total and average lending balances) and delinquencies (accounts in payment arrears).
It delivers account level and consumer level insights spanning the most recent nine quarters, enabling the identification of emerging consumer credit trends and tracking of shifts in demand and supply throughout the economic cycle.
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