Rent-to-own cap a victory for struggling families says Citizens Advice

The Financial Conduct Authority’s recent decision to cap the cost of rent to own or rental purchase white goods will help hundreds of thousands of people who use the high-interest agreements.  The cap, subject to consultation, will come into force on April 1st next year and it is thought will save consumers up to £22.7m a year, although research from Citizens Advice, suggest it could be a lot more.

Under the proposed cap, credit charges cannot be more than twice the cost of the product.  So a consumer buying a fridge costing £250 will pay no more than £500. In some cases consumers have been charged 4 times the original, often inflated cost.  As from next year rent to own retailers, like BrightHouse and PerfectHome will need to benchmark the cost of products against the prices charged by 3 other retailers.  The charity has also welcomed the decision by the regulator to place restrictions on other charges, such as warranties, insurance and arrears.

Janie Moor, CEO of Citizens Advice South Hams, says “ The cap is great news for anyone who has been forced to use rent to own retailers and then struggled with the costs of their credit agreements.  Consumers on low incomes sometimes have very little choice but to resort to this type of credit, yet they come with crippling interest rates on prices that are far higher than anywhere else on the high street.

A cap gets to the heart of the problem by stopping costs from spiralling out of control and pushing people into further debt.  Our evidence has repeatedly shown that well-designed caps can reduce the harm high-cost credit can cause.”

In addition to the changes the FCA is looking into alternatives to high-cost credit. These include not only lower cost credit options but other sources of essential household goods. The FCA has set out what actions it is taking including working closely with the Government and other relevant organisations to support a number of initiatives.


A truly valuable service. My advisor was extremely helpful and reassuring. Thank you.

Deborah – December 2023

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