Nearly one in 10 ‘have used buy now pay later schemes for essentials’
One in 16 people said they have bought groceries using buy now pay later, according to Hargreaves Lansdown.
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Your support makes all the difference.Nearly one in 10 (9%) people have used buy now pay later (BNPL) schemes to cover essentials, a survey has found.
One in 16 people (6%) said they have bought groceries using BNPL, and the same proportion (6%) have used it to buy a takeaway, according to the research for Hargreaves Lansdown.
BNPL schemes can help people to avoid having to pay interest on their borrowing, while still being able to spread paying the money back over a period of time.
However there have been concerns about people potentially taking on debt which they will not comfortably be able to pay back. The cost-of-living crisis may be making it harder for some households to pay for goods in one go.
Sarah Coles, senior personal finance analyst, Hargreaves Lansdown, said: “As prices soar, we’re also starting to fall back on (BNPL) to cover the cost of the essentials.
“Borrowing to pay for essentials feels like a solution in the short term, but, by spreading the cost, it means pushing up your expenses for months, making it even harder to keep on top of your finances.”
The UK Government plans to change the law to bring some forms of unregulated BNPL products into Financial Conduct Authority (FCA) regulation.
Klarna recently announced that it will start to report the use of BNPL products to UK credit reference agencies from June, to protect customers and provide the industry with greater visibility of BNPL use, helping to improve affordability assessments.
The survey of 2,000 people for Hargreaves Lansdown in April found that one in nine (11%) people has used BNPL to buy fashion items.