Over a third - 36 per cent- of Buy Now, Pay Later (BNPL) users don’t fully understand the consequences of missing repayments, according to research released by Barclays.

More than a quarter - 27 per cent - of UK adults have used BNPL, according to the study.

Of those, almost half - 46 per cent - say they are likely to do their Christmas shopping using BNPL according to the research.

In addition, shoppers’ knowledge of BNPL products is patchy according to the research, with two in five - 39 per cent - admitting they lack a full understanding of how the products work.

Over a third - 35 per cent - admitted they’re more likely to use BNPL as the cost of everyday living increases, while 36 per cent admit to using BNPL to buy more than they can afford.

A quarter reported struggling to keep track of their spending having taken out loans with several BNPL providers, and 24 per cent said this has caused them to miss a repayment.

The research claimed that the consequences of defaulting on a loan instalment are not fully understood by 36 per cent of BNPL shoppers.

One in five - 19 per cent - don’t know that some BNPL providers charge late fees for missed payments according to the study, and 20 per cent don’t understand that this can negatively impact their credit score.

“This research shows that more must be done to educate consumers using unregulated BNPL products,” said Antony Stephen, chief executive at Barclays Partner Finance. “Too many people are taking out these loans without realising the impact it could have on their finances and with festive shopping in full swing, it’s important shoppers don’t run risk of signing up to agreements, which they may struggle to repay affordably in future.”

He added: “To protect consumers against taking on more debt than they can comfortably afford to repay, and to ensure minimum standards exist across the sector, we believe regulation should ensure all BNPL providers are required to undertake appropriate affordability assessments, consistent with those in place for other regulated consumer credit products.”

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