Around a quarter of young people in the UK who are making Buy Now Pay Later (BNPL) repayments haven’t been able to pay for food, rent or bills as a result, according to Citizens Advice.
New research from the charity revealed that 45% of 18 to 34 year olds in the country have used Buy Now Pay Later in the last year, with half of recipients not even realising it.
The payment scheme is often used by clothing or electronics retailers at online check-outs, however concerns have been raised that it is pushing consumers into debt.
Citizens Advice is warning that four in 10 of those who have used BNPL in the last 12 months are struggling to repay.
Alistair Cromwell, acting chief executive of Citizens Advice, said: “Buy Now Pay Later borrowing can be like quicksand – easy to unwittingly slip into and much more difficult to get out of.
“It shouldn’t be possible for people to sign up for credit without realising, and the fact this is happening so often signals that a drastic overhaul is needed.”
He added: “This industry more than trebled in 2020, and while these products work for many shoppers, the regulator has rightly recognised the potential for harm. It must ensure robust consumer protection keeps pace with changes in how we shop.”