Debt advisory service MoneyPlus revealed that the growing popularity of BNPL is having a detrimental effect on personal finances. As of January 2024, 41% of new MoneyPlus clients were already burdened with BNPL debt.
As inflation continues to push up living costs, Buy Now, Pay Later (BNPL) schemes have gained significant traction among UK consumers, driven by the desire to keep pace with trends in technology, fashion, and lifestyle.
Recent statistics show that in 2024, over 50% of UK adults—approximately 26 million people—admitted to using BNPL services, reflecting a 36% rise compared to the previous year.
Although 38% of UK residents claim they have never used BNPL and do not intend to, the sharp increase in usage is a growing concern for consumer finances.
Midway through the year, MoneyPlus reported a staggering 915% rise in BNPL-related debt among its customer base. This trend is expected to escalate, as projections indicate the BNPL market will double in size by 2028.
While BNPL is most popular among Gen Z and millennials—with 7 in 10 having used the service—Generation X isn’t far behind, with 52% of this group admitting to BNPL usage.
MoneyPlus attributes the surge in BNPL usage to several factors:
- Ease of access: BNPL makes it effortless for consumers to buy items they might not afford upfront.
- Lack of awareness: Many users are unaware that BNPL is a form of credit, which can lead to unanticipated financial strain.
- Financial vulnerability: BNPL is appealing to individuals with tight budgets, but it can result in mounting debt.
- Accumulation of payments: Multiple purchases using BNPL can quickly spiral into significant debt if repayments aren’t managed.
- Economic challenges: Amid the cost-of-living crisis, BNPL allows consumers to spread payments, increasing its appeal.
Despite the risks, BNPL services offer benefits such as no credit checks and quick access to goods.
Jonathan Mills, Chief Commercial Officer of MoneyPlus, warned: “BNPL offers a convenient solution, but it can easily lead to financial hardship without proper planning. Consumers must carefully consider their ability to afford BNPL purchases. If you’re struggling with repayments, seeking advice from a debt expert is crucial to avoid further difficulties.”