New research suggests that over a quarter of adults in the UK, around 15 million people, will use Buy Now Pay Later (BNPL) services this festive season.

According to a new study by Citizens Advice, 56 per cent of parents with primary school-aged children say they are likely to use BNPL to fund their spending over Christmas.

The organisation said that people who are unable to cover the cost of essentials are more likely to have regularly used BNPL in the past 12 months. The charity also found that 11 per cent of BNPL users used BNPL to pay for groceries, with the figure jumping to 35 per cent for people who regularly use the payment option.

The report says that a fifth of BNPL users have missed or made a late BNPL payment in the past 12 months, with ten per cent getting a visit from an enforcement agency to recoup the debt. It adds that almost a third of BNPL users who were due to make a payment in the last month borrowed money to repay the instalment, leading to more debt.

Citizens Advice warned that the government’s delay in regulating BNPL is putting consumers at risk and exposing them to “unmanageable levels of debt”. The charity added that it has seen a 67 per cent increase in people coming to it for help with BNPL over the past 12 months.

Dame Clare Moriarty, chief executive of Citizens Advice, said that many households were in financial difficulty and extra borrowing over Christmas could deliver “the knockout blow.”

“This should set off alarm bells for the government, whose dithering on regulation of the sector has gone on for too long. As the use of this form of credit soars, the impact of its lack of regulation becomes impossible to ignore,” she added. “Consumers are being failed and as a result could see a 2024 plagued with unmanageable debt, poor credit, and bailiffs knocking at their door.

“The government must act on its almost three-year-old pledge and bring the BNPL market into line urgently."

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