Buy now, pay later boom continues across all age groups
More Brits of all ages are using buy now, pay later (BNPL) services to borrow money, according to newly release figures.
Data from the Centre for Financial Capability also shows that late fees on BNPL have risen across the board.
The charity found that almost a fifth of people aged over 65 said they had used the product or intend to do so in the next 12 months, compared to less than 10% of this age group last year.
BNPL is a payment deferral service offered by companies such as Klarna, Laybuy and ClearPay. It allows customers to spread the cost of retail purchases over a number of weeks or months, often with no additional interest. However, customers can be charged late fees for missed payments, and defaults can show on credit reports.
This type of borrowing has grown in popularity over the past few years despite increasing regulatory scrutiny and concerns over the rate of consumer borrowing.
The study by the Centre for Financial Capability found that younger users are still the group most likely to consider the products.
Of the 18 to 24-year-olds surveyed, 54% expected to use BNPL over the next year, a 6 percentage point increase compared to the same period 12 months ago.
‘Urgent regulation needed for BNPL’
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.”
Research by Equifax found that a third of UK adults have used BNPL at some point, with more than 4 million people borrowing this way for the first time in 2022.
Concerns have been raised by financial experts about the types of purchases that allow BNPL. Klarna teamed up with Deliveroo last year, meaning it’s now possible to defer payment of a takeaway meal.