More shoppers turn to Buy Now Pay Later schemes
15% will always use the credit option if available, compared to just 4% pre-lockdown
UK shoppers are increasingly turning to Buy Now Pay Later (BNPL) schemes – with 15% now always choosing the option if available on their purchases.
As many as 35% of adults says they’ve relied more heavily on BNPL since the Covid pandemic struck, with millions turning to online shopping in the wake of intermittent lockdown measures.
More than a quarter (27%) of those who’ve taken advantage of the delayed payment in the past year couldn’t afford the purchase at the time, while 23% say BNPL suits them better than other forms of debt.
Buy Now Pay Later
The increasingly common BNPL schemes allow shoppers to delay or spread the cost of a purchase made in store or online when available.
Latest comparethemarket.com research shows around 19% of shoppers now use this form of credit for most of their buys – compared to 11% before the pandemic.
The amounts people are deferring also appear to be on the rise, with the average single BNPL purchase now standing at £290, compared to £190 at the end of last year.
John Crossley, head of money, comparethemarket.com says:
“Household finances have been significantly squeezed this year. As a result of the pandemic, more people have turned to online shopping, contributing to a marked uptick in the use of Buy Now Pay Later schemes that has continued beyond the national lockdown.
“When used responsibly, BNPL schemes can be a cost-effective way to manage finances. However, as people use this type of credit more frequently and for larger payments, it is probable that some people will spend beyond their means at a time of unprecedented economic uncertainty.
“Black Friday deals are already being promoted. If you need to take on credit, make sure you do your research on all the options available to you and find the product which best suits your needs. One option could be a credit card, some of which offer 0% interest on new purchases for a fixed time period. Before going ahead with a credit card application, it is always worth checking your eligibility for credit by using a soft eligibility checker which won’t damage your credit score.”
Greater diligence shown
Despite the increased take-up of BNPL schemes, it appears shoppers are showing a higher level of diligence when it comes to paying back on time.
Only 9% of adults have missed a payment in the past 12 months, compared to the 13% recorded in December 2019.
Over one in 10 (13%) though, admit that the availability of BNPL does make them spend more money than they might’ve otherwise.
Young people aged 18-24 have the greatest reliance, with 54% claiming to have used BNPL more since lockdown – with almost a fifth of these (18%) missing a payment in the last year.