Over 40% of young people unaware of the hidden dangers of BNPL

Nearly half (43%) of young people who use buy now, pay later (BNPL) view it as a risk-free payment method.

We surveyed 250 BNPL users aged 18-28 and found that nearly 60% have two to five BNPL plans at any one time, one in five have between six and 10, and 5% have over 15.

While 88% say they’ve never missed a BNPL payment, most admit to using other types of credit alongside it, including credit cards (79%), overdrafts (30%), store cards (16%), car finance (17%) and personal loans (18%).

A risky business

Although regulation of the sector is in the pipeline, no affordability checks are currently carried out. This means people may be taking on debt they’ll struggle to pay back, especially when they’re juggling multiple BNPL plans with other forms of credit.

And our stats would seem to back this up. We’ve seen a 58% year-on-year increase in people seeking help for BNPL debt, with the average amount owed standing at £711.

From occasional use to everyday staple

Our survey also suggests there may have been a shift in the type of products young people are using BNPL for.

When it was first launched, BNPL was largely targeted at people buying relatively expensive one-off essential purchases, such as white goods, where buyers needed to spread the cost.

Our research shows this is still a major use of the payment method among young people (67%).

However, we also discovered:

• 54% use it to buy clothes
• 39% use it to pay for holidays
• 25% use it to cover the cost of festival tickets
• 19% use it for groceries
• 14% use it for takeaways

In fact, a significant number (14%) said they use it whenever it’s an option and 45% admitted it allows them to fund a lifestyle they wouldn’t be able to afford otherwise.

Storing up problems for the future

Commenting on the findings, our director of external relations, Sebrina McCullough, said:

“BNPL is often seen as a risk-free way to spend, and it’s easy to understand why. Interest-free deals and simple sign-up processes make it feel more like a payment method than borrowing. But it is still credit, and when you’re using it on top of other credit or to fund a lifestyle you can’t afford, the risks start to build.”

The results of our survey suggest BNPL has become part of day-to-day life for many young people, helping some manage their money, but creating risks when used without clear limits.

Sebrina added:

“What’s worrying is how embedded BNPL has become in day-to-day spending. Once you’re juggling multiple repayment plans and other debts on top, it can easily spiral. We often see people coming to us when they’re already overwhelmed, unsure where their money’s going each month.”

Regulation can’t come soon enough

The government confirmed last week that it will bring BNPL under the regulation of the Financial Conduct Authority (FCA) from next year. The move will mean stricter affordability checks, clearer information for borrowers and stronger protections if things go wrong.

Sebrina welcomed the move but warned that people could still get into trouble before the new rules are implemented:

“Regulation can’t come soon enough as we’ve seen how BNPL can encourage spending without full appreciation of the risks. While we welcome the FCA’s involvement, the new rules won’t be in place for months. Until then, we’re urging people to approach BNPL with caution and make sure they’ve got a plan to repay.”

She added:

“Used within affordable limits, BNPL can work for some people. But if you find yourself relying on it regularly or using it to cover everyday costs, it might be a sign that you need a bit of support. Reaching out for free debt advice or doing a quick budget review can help you feel more in control and plan ahead with confidence.”