It means lenders will need to undertake more robust affordability checks on borrowers and offer clearer information, only issuing credit that’s “genuinely affordable”.And financial watchdogs will have the power to clamp down on firms, with the Financial Conduct Authority able to withdraw their authorisation to operate in the UK if they contravene the rules.

Consumers will also be able to go to the Financial Ombudsman Service if they’re unhappy.City minister Andrew Griffith said consumers should be able to access affordable credit, but “with clear protections in place”. The government is planning to introduce legislation in parliament in the middle of this year with relevant players in the industry currently being asked to give their opinions on the proposed rules.Meanwhile, personal finance specialist NerdWallet has launched a study that shows as many as one in six (15%) UK consumers currently in debt owe money to BNPL providers such as Klarna or Clearpay.And 47% believe they will need to take on more debt in the time it takes them to pay off existing debt.BNPL demand is most common among Millennials as over 22% of adults aged 25-44 admit to being in debt to short-term credit providers. But the figure is almost as high (at 21%) for Gen Z.However, both of these age groups are even more likely to be in debt due to credit card usage or loans. NerdWallet spoke to over 2,000 UK adults to reach its conclusions.The report also discovered that women are almost twice as likely as men to owe money through BNPL providers, with 20% of women stating they owe money here compared to just 11% of men.