The study aimed to find out more about consumer trends and user habits of Buy Now Pay Later services, which has become one of the most popular payment methods in the UK today.

More than 17 million consumers in the UK have used a BNPL service, with platforms such as Klarna, Clearpay and Laybuy being some of the most popular. As BNPL becomes more of a mainstream payment method, we’re likely to see a rise in the number of people getting into financial difficulty in the process.

Focusing on the topic of debt, the survey also found that around one third (32%) said they had experienced financial difficulties as a result of using a BNPL service.

An alarming one in six (15%) revealed that they had missed a payment for an expense elsewhere, such as a utility bill, credit card, loan or a mortgage payment, as a result of meeting a BNPL payment deadline. Almost three quarters of those who stated this were millennials aged between 25 and 44 years old.

Those in the 35 to 44 age bracket were most likely to incur a late payment fee, with 44% stating they have had to pay a penalty in the past, while the baby boomer generation were found to be the least likely to incur late payment fees, with only 10% suggesting they had missed a payment.

The survey also identified that some consumers continue to use BNPL services despite having accumulated debts elsewhere. Once again, Millennials were the most likely to continue using BNPL whilst being in debt with nearly 40% falling into this category. The generation least likely to continue using BNPL whilst having debts accumulated elsewhere are Gen Z (18-24 years old), with just 6% stating they continue to use the facility.

Purchase Insights

When asked what they most commonly purchase using BNPL, clothing and footwear was the most popular amongst respondents (62 %). two thirds (66%) of women listed this category as what they’re most likely to buy, with the figure for men standing at 57%.

The survey also identified that consumers were using BNPL to pay for food, drink and household essentials, with just over 14% stating they’d used them as a payment method to pay for these items. Of those respondents using BNPL to pay for food and drink, Millennials were found to be the biggest cohort in this category, making up a whopping 84% of all respondents.

The survey also identified an emerging trend of using BNPL services to pay for household bills. Whilst only 7% of those surveyed stated they use BNPL to pay a bill or a monthly outgoing, it was predominantly Millennials who said they use it for this type of expense (71%).

Spending habits

The survey further uncovered the fact that men were likely to spend more using BNPL than women, with 32% suggesting their average monthly spend is between ?100 and ?300. Comparatively, the results showed that women were most likely to pay for smaller transactions, with one third (31%) suggesting they would spend around ?50 to ?100 each month using BNPL.

When asked about what was the most appealing aspect of BNPL, 43% of respondents said that they found that the ability to pay in instalments allowed them to better manage their monthly and long term finances Moreover, 29% of respondents said that the ability to delay the payment for products and services they want right now appealed to them the most.

Commenting on the results, Liz Hunter, Commercial Director at Money Expert said:, “It’s clear that Buy Now Pay Later services have made a big impact on the way we pay for our goods and services in the UK and it’s clear that the zero interest, short term loan facility has gone down well with consumers, allowing them to purchase what they want without having to wait.

“However, the study does suggest that because BNPL only run minimal affordability checks, we’re starting to see more people using them to obtain goods that traditionally we wouldn’t pay for using any sort of credit facility, such as food and household bills. This trend is likely a result of theo ongoing cost of living crisis, as well as increasing food and energy prices with inflation starting to bite, making it more difficult for households to afford the essentials we need to survive.”

Hunter went on to add that, “The survey not only identified Millennials as the cohort most likely to be using BNPL services, but also the generation most likely to be missing payments and thus potentially accumulating unwanted debt.”

“When used correctly, the BNPL payment model can be a convenient and useful alternative to paying for goods and services upfront, however consumers need to ensure that they will be able to meet the payment deadlines on time and only use BNPL services if they’re confident they will have the funds to pay off the balance. Missing payments could result in late payment fees and a negative effect on your credit score, which could cause issues when applying for credit in the future.”