1 in 4 young adults turn to BNPL for everyday spending

There’s a view that many people, young people in particular, borrow money to fund extravagant lifestyles they can’t afford, but that’s not true, as a worryingly large number are borrowing just to get by.

According to Money Ready, seven in 10 adults aged 18 to 40 are using at least one form of credit to cover their housing costs.

And buy now, pay later (BNPL) schemes are one popular option, with almost one in four (24%) using them to cover bills including rent and mortgages.

What is buy now, pay later?

BNPL allows you to split the cost of a purchase into smaller instalments, usually over several months. Many providers offer this without charging interest if you pay on time.

It has become hugely popular, with around half of UK adults having used BNPL at some point.

Young adults borrowing to survive

When used carefully, BNPL can be a useful, interest-free way to spread the cost of bigger purchases.

But if people are increasingly using it to plug gaps in their everyday budgets and pay for essentials like food, that’s a real problem.

Money Ready describes what’s happening as “survival borrowing” that leaves many young adults “unable to get out of the debt spiral they find themselves in”. 

And we’ve seen a similar pattern ourselves.

Our customers aged 18 to 24 are twice as likely to have a BNPL account as older age groups - a measure of how young people in particular are increasingly turning to this type of credit.

“The prevailing thought that young people fall into debt because of luxury spending or lifestyle choices is a total myth,” said Becky Young of Money Ready.

“They borrow to keep a roof over their heads.

“When a third of young adults are relying on credit cards just to pay their rent or essential bills, it is clear that the system is broken.”

If BNPL is becoming difficult to manage, get support early

BNPL can be a useful budgeting tool, but if you’re using it regularly for essentials, juggling several accounts, or worrying about repayments, it may be time to seek support.

Getting debt advice early can help you understand your options and prevent small problems from escalating.