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Inaction on Buy Now Pay Later risks growing levels of unaffordable debt

You might have used, or are currently using Buy Now Pay Later (BNPL) finance. BNPL is not new, but its availability and popularity have grown rapidly. It is offered in-store and online, from takeaway food to fashion, tempting you to buy now and pay interest-free for a few months, or to let the debt turn into a longer-term, interest-bearing loan.

It’s now used by more than 1 in 3 (37%) U.K. adults, but unlike credit cards or bank loans, BNPL is largely unregulated, meaning that customers do not get the level of support or protection that would be standard practice with other forms of credit.

The cost of living crisis sees more people turning to easy-access credit options like BNPL to meet everyday costs. Some are facing real hardship and are relying on credit to buy essentials such as groceries. While this might provide some temporary relief, it can quickly worsen someone’s situation if they are not able to afford the repayments.

Citizens Advice has seen a sharp rise in the number of people needing our advice for problems related to BNPL. Our latest research shows that in the last 12 months, 1 in 5 (21%) BNPL users missed or made a late payment.

Worryingly, we have seen that BNPL instalments are being prioritised overpayment of priority debts, like utility bills, rent/mortgages, and council tax. This is concerning as non-payment of these debts could have severe consequences, including the risk of enforcement action, bailiffs knocking at the door, and disconnection.

It’s now been almost three years since the government committed to bringing these products into regulation, and Citizens Advice is calling on the government to act.

Similar to credit card and bank loan lenders, regulation would create consistent expectations for firms to deliver responsible lending and affordability checks, crucial for ensuring that lending is not taking place at levels that could put someone at risk of further harm.

Regulation would also mean that people who are struggling to repay their debt would be able to expect a certain level of support from their lender, and would have recourse to the Financial Ombudsman Service in the event they were not able to get the support they needed.

Unless the government acts quickly, we risk seeing spiraling numbers of people struggling with unmanageable debts that could have been prevented.


Citizens Advice North Hertfordshire is an independent, local charity reliant on raising our own funds to carry out our work to improve the lives of residents in North Hertfordshire and parts of South Cambridgeshire. 

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The number above is for the Hertfordshire Citizens Advice Line.   Opening hours are 10 am to 9 pm Monday to Wednesday, 10 am to 8 pm Thursday and Friday, and 10 am to 4 pm on Saturday.

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