Half of Adults in the UK Have Now Used Buy Now, Pay Later

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The popularity of BNPL keeps growing, but consumers are still waiting for better protection.

Half of adults in the UK – around 26.4 million Brits – have now used buy now, pay later (BNPL), according to new research.

BNPL allows you to buy an item typically by paying a small amount upfront and using a short-term credit agreement to pay the rest in instalments or in a lump sum. Unlike credit cards and loans, BNPL isn’t regulated, which means there’s less protection if things go wrong.

BNPL has been growing in popularity in the UK. Half of adults in the UK (50%) have now used BNPL at some point, up from 36% at the start of 2023. Around 7.7 million Brits used BNPL for the first time in the year to January 2024, according to the research from personal finance comparison site finder.com.

What happens if things go wrong?

The UK government announced plans to regulate the BNPL sector in 2021 and released a draft of new rules in February 2023. But the process has stalled despite ongoing pressure from the Financial Conduct Authority (FCA). The government appears to be dragging its heels over fears that several major BNPL companies might quit the UK.

BNPL customers currently can’t use the Financial Ombudsman if they have a complaint about their BNPL provider, and firms don’t have to carry out affordability checks or provide key information in the same way that other credit companies do.

How many people are paying late fees?

The survey by finder.com also found that a high number of BNPL users are paying late fees, meaning they have missed repayments. More than half (53%) of those who used BNPL in the past year had paid at least one late fee, with the average payment £23.50.

Liz Edwards, editor-in-chief at finder.com, has warned about the risks of signing up for unregulated BNPL agreements.

“There are millions of Brits turning to buy now, pay later during a cost of living crisis, but it’s a total lottery whether they can actually afford it – because BNPL lenders don’t have to check before approving them – whether they’ll get the information they need, whether they’ll be charged a late fee if they miss a payment, and whether, if they can’t pay, the bailiffs will show up,” she said.

“Consumers need the same protections in this sector that they get with other types of credit – they need proper information upfront, such as what the deal is and what happens if they miss a payment, and they need to be able to complain to the Financial Ombudsman if things go wrong, which currently, they can’t.

“When I spoke to the Financial Ombudsman’s office about BNPL complaints, it couldn’t tell me how many it had received as it doesn’t keep records for unregulated products, since it can’t investigate them.”

About the author

Sophie Barber is a content manager for finder.com in the UK and she has over 5 years of experience in writing and publishing informative online articles for a variety of websites. She has a Master’s in English from the University of Exeter and is passionate about creating content that taps into trending topics and helps make personal finance decisions easier.

This article originally appeared on finder.com/uk and was syndicated by MediaFeed.org.

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