Banking giant Barclays becomes the first lender to offer early payouts to drivers ripped off in the car finance scandal

Barclays Partner Finance will reach out to a select group of customers over the next few weeks, applying the Financial Conduct Authority's own redress scheme calculations to determine payouts averaging £829. The move follows the suspension in July of the FCA's £9.1 billion mass redress scheme after legal challenges from the finance arms of Volkswagen, Mercedes and three other industry players, with an Upper Tribunal hearing scheduled for February 2027.

Customers who accept an early offer cannot later claim additional compensation — and those who decline will wait until after February's court ruling.

The FCA has told lenders they cannot imply it has vetted or endorsed specific cash offers, and payouts must be no less than what consumers would have received at the top end of the original scheme.

Martin Lewis warns there is a small risk to accepting early — if the legal challenge succeeds and the scheme collapses, those who waited could end up reclaiming through a more complex process.