On 27 January 2025, the Lending Standards Board (LSB) published its consultation response and next steps following a review of its Standards of Lending Practice for Personal Customers (the personal Standards). The document includes the announcement that the personal Standards will be retired on 31 March 2025.
Background
The personal Standards, which were launched in 2016, set a best practice lending framework for UK financial services firms and consumers. Like the LSB’s other Standards and Codes, the personal Standards are subject to regular review and the most recent one was conducted during 2024.
The LSB’s consultation on this review was particularly significant as it examined the personal Standards in the context of the Financial Conduct Authority’s Consumer Duty, which adopts the outcomes-focused approach to delivering consumer protections previously introduced by the personal Standards.
Review conclusions and next steps
The LSB explains in the response that there is now considerable overlap in coverage between the personal Standards and statutory regulation, as a result of recent changes in the statutory framework including the introduction of the Consumer Duty. In light of this, the personal Standards will be wound down.
However, in response to demand from firms and other stakeholders, the LSB will develop new guidance for firms in key areas relevant to personal financial services customers, including areas identified in the review and those where, through the LSB’s wider work, it is clear that firms would benefit from support. For example, these areas may include how firms should support vulnerable customers or customers in financial difficulty, how firms can protect customer outcomes while managing digital transitions, and how firms can ensure they are adopting an inclusive approach.
The LSB also plans to roll out customer outcomes testing and benchmarking activity designed to allow firms to track the impact of their efforts to meet best practice and understand how customer outcomes are improving over time. Benchmarking will be delivered at a sector-wide level and within peer groups.
Any firms registered with the personal Standards will be automatically de-registered from 31 March 2025.