Consumer finance new business increased by 20% in May

New figures released by the Finance & Leasing Association (FLA) show that consumer finance new business grew by 20% in May 2022 compared with the same month in 2021. In the five months to May 2022, new business was 28% higher than in the same period in 2021.

The credit card and personal loan sectors together reported new business up by 32% in May compared with the same month in 2021, while the retail store and online credit sector reported new business growth of 15% over the same period.

Commenting on the figures, Geraldine Kilkelly, Director of Research and Chief Economist at the FLA, said “The consumer finance market returned another strong performance in May with further growth across each of the main finance products reflecting the post-pandemic recovery and the higher cost of goods and vehicles faced by consumers.”

“Pressures on household incomes from higher inflation, interest rates and taxes are expected to subdue consumer spending in the coming months.  Growth in UK consumer credit is expected to ease, with gross lending forecast to grow by 14% in Q3 2022 and 9% in Q4 2022 compared with the same quarter in 2021.”

“As always, customers who are concerned about meeting payments should speak to their lender as soon as possible to find a solution.”

New consumer credit lending

	May 2022	% change on prev. year	3 months to May 2022	% change on prev. year	12 months to May 2022	% change on prev. year
Total FLA consumer finance (£m)	10,432	20	31,284	20	111,697	20
Data extracts:
Retail store and online credit (£m)	810	15	2,315	12	9,544	6
Credit cards & personal loans (£m)	5,460	32	15,418	31	56,210	31
Second charge mortgages (£m)	133	53	399	53	1,331	73
Car finance (£m)	3,645	6	12,034	9	40,452	10