Cost of living help: Subscription traps to be banned – what it means for your money

Millions of households could find it easier to save money on unwanted subscriptions and avoid misleading discounts sooner as the Government brings forward plans to tackle subscription traps and rip-off pricing.

The changes are part of a package of measures to help the cost of living for British households.

Under the new rules, people will find it easier to cancel subscriptions with retailers facing tougher rules around how they advertise discounts.

The plans were initially announced in April and were set to take effect next spring, but now they are due to come in from January 2027.

When will subscription traps be banned?

New rules to tackle subscription traps will come into force in January 2027.

A subscription trap is where someone signs up for a product or service but then finds it difficult to cancel.

The changes are designed to make it easier for customers to understand what they are signing up for and cancel subscriptions they no longer want.

The Government says the rules are being introduced ahead of the point in the year when many people start new subscriptions for the year ahead.

There are currently around 155 million active subscriptions in the UK, with consumers estimated to spend around £1.6 billion a year on subscriptions they don't actually want.

What will change for subscription customers?

Under the new rules, businesses will have to make subscriptions easier to understand and easier to leave.

At the moment, some businesses make cancellation deliberately complicated, meaning customers can end up paying for a service they no longer use.

Companies will need to provide clearer information before customers sign up, regular reminders about subscriptions and a much easier way to cancel.

Three will also be a new 14-day cooling-off period after a free or discounted trial ends or a long-term contract renews.

The aim is to prevent people from continuing to pay for services simply because they have forgotten about them or found it difficult to cancel.

The Government estimates that consumers could save an average of £14 a month for every unwanted subscription.

What happens if you have an unwanted subscription now?

The new rules don't come into force until January 2027, so you shouldn't wait until then to cancel subscriptions you don't want.

Check your bank account and credit card statements for recurring payments and make a list of subscriptions you no longer use.

These could include gym memberships and apps, as well as software and other membership schemes.

If you find a subscription you no longer want, contact the company and ask to cancel it.

Misleading discounts could also be banned

The Government is also taking action against misleading discounts and fake bargains.

It wants to stop retailers using pricing tactics that give customers a false impression that they are getting a large saving.

One example is a retailer increasing the price of an item shortly before putting it "on sale", making the discount appear much bigger than it really is.

Another example is advertising a product at a "discounted" price when that price is actually the same as, or very close to, the price it was previously sold for.

The Government says these practices can trick shoppers into thinking they are getting a good deal when they aren't.

How can you avoid misleading discounts?

Until the new rules come into force, don't assume a large percentage discount automatically means you're getting a good deal.

Before buying something in a sale:

• Check the price at other retailers.

• Search for the product's previous selling price.

• Compare the actual price rather than focusing on the percentage saving.

• Be wary if a retailer claims an unusually large discount.

• Consider whether you actually need the item before buying it.

A product being reduced from £100 to £50 is only a bargain if £50 represents good value compared with what the same product is available for elsewhere.