The products, which allow users to defer or divide payments into instalments, have grown in popularity despite increasing regulatory scrutiny and concerns over the rate of consumer borrowing.
According to a survey commissioned by UK-based financial education charity The Centre for Financial Capability[1], younger users are still the group most likely to consider the products. Of the 18 to 24-year-olds surveyed, 54 per cent expect to take out a loan over the next year, a 6-percentage point increase compared to the same period 12 months ago.
However, campaigners are more worried about the fact that demand has increased among older people. Almost a fifth of over-65-year-olds say they had used the products or intend to do so in the next 12 months, according to the same survey, compared to less than 10 per cent last year. Jane Goodland, trustee of the Centre for Financial Capability, said
The fact that people of all ages are turning to buy now, pay later as they are struggling to meet payments due to rising inflation shows the need for urgent regulation of these schemes.”
Jane Goodland, trustee of the Centre for Financial Capability
BNPL is currently unregulated in the UK, however, in June 2022, the UK government laid out plans for new rules to improve consumer protection, including requiring providers to carry out checks that customers can afford to take out loans. The Financial Conduct Authority has previously used the broader legislation of the Consumer Rights Act to drive providers to change some contract terms.
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