The UK's new subscription contracts regime: what, when and why?

Complex new rules governing consumer subscription contracts in the UK are expected to come into force in January 2027. We explain what the legislation requires and what businesses should be doing to prepare.

NOTE: On 2 April 2026, the Government published its response to the consultation on the implementation of the new subscription contracts regime (which ran from November 2024 to February 2025). This updated briefing incorporates the key outcomes of that consultation response, together with the Government's announcement that the rules would be brought into force from January 2027 (not "Spring 2027", as previously announced). The subscription contracts regime is complex and this briefing is only a summary of the key requirements and key issues that businesses need to consider. It is not intended to provide a fully comprehensive guide to the legislation.

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Why are subscription contracts being regulated – and what's the risk of failing to comply?

Many UK consumer-facing businesses use a subscription model and the market as a whole is estimated to be worth £26 billion a year (with an estimated £1.6 billion a year spent on unwanted subscriptions). The UK Government decided to regulate because of concerns that consumers often forget what they've signed up for and don't realise when contracts have renewed, potentially locking them into purchasing goods or services they aren't always using for a significant period. The new regime is intended to ensure that consumers:

Are given clearer information when they first sign up;
Benefit from a cooling-off period (allowing them to withdraw if they change their minds); and
Get periodic reminders before subscriptions are due to renew.

As we explain below, however, the new rules are quite prescriptive and are not entirely straightforward to apply.

What's the risk of failing to comply?

The new regime is being introduced under the Digital Markets, Competition and Consumers Act 2024. That Act also gives the UK's lead consumer regulator, the Competition and Markets Authority (CMA), tough new powers to enforce consumer law, which it has recently begun to use. These include the ability to impose fines of up to 10% of turnover, together with "redress orders", which – in this context – could include an order to contact all affected consumers, offering them a right to cancel with a full refund.

But there are risks even if the CMA doesn't investigate. For example, it's easy to see how an internet campaign alerting consumers to their ability to get out of certain subscription contracts could result in a business losing a significant proportion of its expected revenue stream for the next 6-18 months – none of which would require CMA intervention. Meanwhile, in April 2026, the Government made clear (in its response to its 2024-25 consultation) that non-compliance will have certain other consequences that will not require CMA intervention either. These are explained below.

Failure to notify consumers of cooling-off rights

If consumers have not been given the correct information about subscription contracts, the Government has confirmed in its April 2026 consultation response that the cooling-off period will extend up to a maximum of 12 months – unless the trader corrects its breach (in which case the cooling-off period extends for 14 days after the trader remedies its breach). During this extended period, consumers can cancel without penalty.

Failure to comply with other requirements

If a business fails to comply with other duties under the regime - for example, by failing to issue a reminder notice about a renewal payment - the consumer will be able to cancel and there will be a presumption that they can claim a refund of all payments made from the point at which the breach began until the consumer cancels the contract.

It is not entirely clear to what extent businesses will be able to argue that the refund should be reduced to reflect the consumer's continued use of the subscription up to the date of cancellation- however, the use of the word "presumed" suggests this may be possible.

Automatic refund entitlement for certain breaches

To make it easier for consumers to enforce their rights, the Government has confirmed that it will publish a list of specific breaches that will automatically entitle a consumer to a refund - without needing to prove financial loss.

What's the timing - and why prepare now?

The Government has indicated that it expects to implement the new rules in January 2027 (having previously indicated that it was aiming for "Spring 2027"). However, it's important to note that most of the other consumer law provisions of the Digital Markets, Competition and Consumers Act 2024 have been in force since April 2025 – and in April 2026, the CMA imposed its first fine on a business for breaching consumer law.

Why prepare now?

Although January 2027 may seem some way off, many businesses will need to plan ahead to some degree – for example, CRM systems may need modifying to ensure that the business sends the correct materials to consumers at the correct times – which may need to be scheduled and scoped out sooner rather than later. Similarly, contracts with key suppliers may be up for renegotiation on a timescale that does not align neatly with the January 2027 start date for the new regime.

Ideally, businesses would await the publication of official guidance on the new regime before starting to prepare – but it is not clear when that guidance will become available. In the past, official guidance has sometimes not been finalised until very shortly before the relevant legislation was due to come into force. It may therefore be unwise to hold off on all preparations in anticipation of the guidance. Our view is that the legislation, combined with the Government's response to consultation, provide enough of a steer to enable at least some meaningful planning to take place now.

What's caught by the new regime?

The concept of a "subscription contract" under the new regime is broad. It is defined as an agreement that provides for an automatically recurring or continuous supply of goods, services or digital content to the consumer for either an indefinite or fixed period (there is no minimum or maximum subscription period). In particular, the following arrangements are – subject to the exceptions highlighted below – likely to be caught:

A rolling monthly subscription, continuing for an indefinite period (such as a gym membership); and
A 6, 12 or 18-month subscription which auto-renews i.e. where the consumer would need to take action to stop it rolling over into a new contract at the end of the first 12 months (such as a magazine or newspaper subscription (whether digital or in print))

NOTE: these are just examples and the regime is applicable to a wide range of other types of subscriptions with different durations and renewal terms.

Subscriptions which offer an initial free period will also be caught. Even businesses which do not use subscriptions as part of their core offering may be caught - for example, a visitor attraction that offers annual season tickets which auto-renew.

What are the key exclusions?

Regulated activities: Utilities, financial services, certain healthcare and medical contracts, contracts for the supply of certain services regulated by Ofcom, certain gambling contracts and participating in the National Lottery (the thinking being that existing regulatory regimes will generally be sufficient to protect consumers);
Accommodation and Travel: Residential accommodation rental contracts, leisure activities tied to a specific date, package holiday and package travel contracts;
Education Purposes: Contracts for the supply of childcare and school age education;
Charity Contracts: Contracts between charities and consumers (such as those that allow consumers to attend performances, see collections or visit certain locations) which are for a charitable purpose (as confirmed by the Government in its consultation response); and
Gift Aid: Charity subscriptions which qualify for Gift Aid are also excluded.

NOTE: As the exclusions (other than those relating to charity contracts) are set out in the legislation, this is an area which we can advise on now. It is important, however, not to interpret these exclusions too widely. For example, the exclusion for utilities does not mean that a contract for annual boiler or heat pump maintenance would be out of scope, merely because it relates to the energy sector (although if the service is provided under a contract of insurance, the financial services exclusion could apply).

Pre-Contract Information

The new regime requires the following pre-contract information to be provided to the consumer:

Key Pre-Contract Information: this is the "headline" information about the subscription and includes details such as the amount and frequency of payments, the auto-renewal mechanism, the termination process, the right to cancel during the cooling-off period and information regarding reminder notices (see below).
Full Pre-Contract Information: this is intended to provide more comprehensive information (intended, for example, to assist consumers who want to review their purchase during the cooling-off period). It includes details about the product or service, such as its main features, pricing and delivery arrangements, after-sale support, cooling-off periods, relevant technical protection measures, business identity, and details of dispute resolution processes, and certain policies and codes of conduct.

When and how must the information be presented?

Both sets of information must be given to the consumer as close in time to entering the contract as possible – and there are strict rules about how they must be presented. For example, each set of information must be provided separately, so it's not possible to combine them – nor is it possible to rely on the fact that some of the same information may have been given to the consumer at an earlier stage of the sales process. Businesses will therefore need to give careful consideration to how the required information is integrated into consumers' "purchase journey".

As noted earlier, one consequence of failure to comply is that, in some cases, consumers may benefit from a cooling-off period that extends substantially beyond the usual 14 days – allowing them to cancel at a much later date. The April 2026 consultation response confirmed that further details on the presentation and content of pre-contract information will be issued in guidance.

Reminder notices

The new regime requires businesses to send consumers regular reminder notices about upcoming renewal payments for their subscription contracts. As with pre-contract information, the rules are not entirely straightforward and the timing is likely to vary, depending on the terms of the subscription.

Timing issues: an example

A business that offers a rolling subscription, auto-renewing monthly, would typically need to send reminders no more than once in every 6 month period (starting from the date the contract commenced). However, the notice would need to be provided to the consumer sufficiently far in advance of their next renewal payment that they could, if they wished, cancel the subscription and avoid having to make the payment. If the consumer is required to give 6 weeks' prior notice to cancel, then sending a reminder notice 5 months after the contract started will almost certainly be too late. In practice, the notice would probably need to be sent out at around the 4 month stage, to give the consumer sufficient time to consider whether they want to give 6 weeks' notice to avoid the next payment. Additional reminder notices are required where the consumer benefits from an initial free period before payments start.

What does the reminder notice need to say?

As with pre-contract information, the new regime is quite prescriptive about the content of reminder notices. For example, they must not only include the amount of the renewal payment and when it will be payable, but also how it differs as compared with the previous renewal payment and how to end the contract to avoid liability for renewal payments.

Format and presentation of notices

The April 2026 consultation response also confirmed a number of practical points on the format and presentation of reminder notices, cooling-off notices (please see below for further details) and end-of-contract notices - including that these must be given on a durable medium (such as a letter, email or WhatsApp message, but not a brief in-app notification) and that prescribed information must be more prominent than any other information given at the same time.

Cooling-off periods, refunds and cancellation rights

The new regime also requires consumers to be given cooling-off periods, during which they can cancel their subscription contract and have any fees refunded. In all cases, there will be a 14 day cooling-off period at the start of the subscription. Further 14 day renewal cooling-off periods are required in the following circumstances:

at the end of any concessionary period (for example, after a free trial or introductory offer, when the first full payment is due); and
for renewals of a subscription contract that commit the consumer for another period of 12 months or more.

Renewal cooling off periods: key points

For each renewal cooling-off period, a business must give the consumer a separate "cooling-off" notice. As with pre-contract information and reminder notices, the rules are quite prescriptive about both the timing and content of this notice. In particular:

it's not possible to combine the notice with other obligatory information;
it needs to be sent on the first day of the renewal cooling-off period or as soon as reasonably practicable after that day; and
it needs to set out certain information, including how to cancel, the timeframe for doing so and any refunds or deductions that might be made.

As noted above, the Government consultation response confirmed a number of practical points regarding the format and presentation of cooling-off notices (please see Section 5 above for further details).

Can the consumer be charged if they cancel, but have used the subscription in the cooling-off period?

An obvious concern in relation to cancellation rights is that some consumers may use the subscription during the 14 day cooling-off period and then cancel, seeking a full refund.

The Government has confirmed its position on this in its response to its consultation published in April 2026.

Where a consumer cancels within the 14 day cooling off period, businesses will be able to make deductions in certain circumstances – however, businesses risk being out of pocket where the cost of services or unreturnable goods already provided by the business exceeds the initial payment by the consumer. The example in the textbox below illustrates how this could happen.

How businesses could end up out of pocket: an example

A consumer signs up to a 12 month subscription costing £60 a month (£720 a year) for beauty products and services, including 4 online consultations with advisers.
The consumer opts to start the subscription immediately, without waiting for the cooling off period to expire.
During the initial 14 day cooling off period, the consumer uses 2 of the 4 online consultations. They cancel the subscription on day 13 and claim a full refund.
As the consumer has used the subscription during the cooling off period, the business would be entitled to make a proportionate deduction from any refund in order to reflect that usage.
The cost to the business of each online consultation is £50 i.e. £100 in total – so even if it retains the initial £60 monthly fee (which it would arguably be entitled to do), it would still be £40 out of pocket.

This highlights how businesses which are concerned about possible "binge and cancel" behaviour by consumers may need to think carefully about how they structure their subscriptions. In this case, the business might look to limit the online consultations to one a month or only allow them to be booked in month 2. It's also important to note that the rules on refunds vary depending on whether the subscription involves returnable goods, sealed, perishable or bespoke goods, services or digital content.

How we can help

The new subscription contracts regime – though well intentioned – is not particularly straightforward. At Travers Smith, we understand the importance of achieving compliance in a way which fits with how you want to engage with consumers and minimises disruption to your business. We won't lose sight of the bigger picture and can guide you through how the subscription contracts regime interacts with other relevant legislation, such as the distance selling rules and the law governing unfair terms and unfair practices.

More widely, our team has extensive experience in advising on consumer law matters (including CMA investigations). We recognise the need to adopt a pragmatic approach, focussing on the highest areas of risk whilst ensuring that you are still able to achieve your commercial objectives.

To find out more, please speak to any of the contacts listed below.

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