Citizens Advice survey: One in four adults likely to turn to buy-now-pay-later schemes to afford Christmas

More than half of parents with children in primary school are likely to use buy-now-pay-later (BNPL) schemes to afford Christmas, according to research from Citizens Advice.

Roughly 15.1 million people – more than one in four UK adults – also reported they’re likely to buy goods on credit using BNPL services to help with festive spending, a survey said.

The research showed just over one in five people who have taken credit using BNPL have missed a payment or paid late.

It comes as the independent, state-funded advice service recorded a 67% rise in people seeking help with BNPL debt in the 12 months to 31 October this year, compared to a year earlier.

The finding emerged from two surveys by Opinium, one of which polled 2,156 UK adults on the use of BNPL products and Christmas spending in the period 1-3 November and another of 2,132 UK adults who had purchased anything using a BNPL product in the last 12 months between 6 and 15 November.

Some 10% of surveyed BNPL users missed or made a late payment in the last year and were visited by an enforcement agency or bailiff as a result.

Nearly a third (29%) of users due to make a payment in the last month borrowed further to repay instalments, adding to a cycle of debt.

Citizens Advice, MoneySavingExpert and Which? jointly urged the government recently to protect BNPL users

Citizens Advice has now called on ministers to enact BNPL regulation after legislation was shelved amid Whitehall concerns that it could curb the availability of low-interest products.

“Consumers are being failed and as a result could see a 2024 plagued with unmanageable debt, poor credit, and bailiffs knocking at their door,” said the Citizens Advice chief executive, Dame Clare Moriarty.

“The government must act on its almost three-year-old pledge and bring the BNPL market into line urgently.”

It follows research with similar findings from the Financial Conduct Authority (FCA).

Those frequently using BNPL were more likely to be in financial difficulty, the finance regulator said.

FCA figures showed roughly 14 million people used (BNPL) to purchase something in the six months to January 2023.

An HM Treasury spokesman said in response: “When used appropriately, buy-now-pay-later can be a useful, interest-free way for consumers to manage their finances.

“We must ensure that regulation of these products is proportionate to ensure borrowers are protected without unduly restricting access.

“We will publish a response to our recent consultation once it is finalised.”