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A quarter of young people making Buy Now Pay Later repayments haven’t been able to pay for food, rent or bills as a result, Citizens Advice has found.
New research from Citizens Advice shows 45% of 18 to 34 year olds in the UK have used Buy Now Pay Later in the last 12 months. Alarmingly, half of these did it without realising and one in three went on to regret it.
Buy Now Pay Later is often advertised at online checkouts as an easy way of splitting or delaying payments on items such as clothing or electronics, with incentives like it being ‘interest-free’. But Citizens Advice fears for many people it can be a slippery slope into debt.
Overall, 27% of UK adults have used these firms in the last 12 months, rising to 37% of disabled people and 45% of people with a mental health problem.
The average person was repaying £63 a month. But Citizens Advice found almost two in five (5.7 million) who’ve used Buy Now Pay Later in the last year didn’t think it was ‘proper borrowing’ and six million didn’t fully understand what they were signing up for.
The charity is warning that four in 10 of those who’ve used Buy Now Pay Later in the last 12 months are struggling to repay. It found a quarter of consumers regretted paying using these platforms, with the most common reasons being spending more than they can afford, and paying more than they expected.
And repayments are not the only problem, with three in 10 Buy Now Pay Later users saying they’ve been charged a fee they didn’t expect.
In a separate survey of 280 of the charity’s frontline advisers, more than a fifth said they had advised or were aware of people with Buy Now Pay Later issues, with just over two fifths of these seeing an increase since the start of the pandemic.
Opinium carried out a nationally representative survey of 10,000 adults in the UK between 28 January and 14 February 2021. 2,700 respondents had used Buy Now Pay Later (BNPL) in the past 12 months.
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