Young people are relying on non-traditional forms of credit, such as Buy Now Pay Later schemes (BNPL), to cover their finances during lockdown as a result of COVID-19.

New research from reveals that nearly a quarter (23%) of 18-24 year-olds are more likely to use BNPL to fund purchases since the government lockdown. While only 16% of Generation Z said they had bought items using BNPL, of those who had, almost two thirds (64%) said they had spent more than they would normally on this type of purchase.

The findings are in contrast with the rest of the adult population in the UK where only 7% had made a BNPL purchase since the lockdown was imposed on 23rd March 2020. In fact, wider public sentiment may be turning against this form of consumer credit. At a time where many households are wary of taking on more debt than necessary, over half (54%) of respondents said they would never use a BNPL scheme, and two-fifths (40%) believe it is inappropriate for retailers to advertise these schemes.

The option to spread payments into smaller amounts appears to be more attractive to Generation Z than other age groups. Less than a third (31%) of those aged 18-24 agree that is it financially irresponsible for BNPL payment plans to be advertised at the current time. By contrast almost half (46%) of those aged 55-64 agree that it is irresponsible.

Retailers may be placing increased focus on BNPL payments in order to sell products at a time when the pandemic has placed significant pressure on the sector. Nearly a fifth (18%) of shoppers had noticed more BNPL plans being offered to them when shopping online since the lockdown was imposed. This figure jumps to 33% among Generation Z, demonstrating the power of targeted advertising techniques.

Just over one in ten (13%) of people in the UK say they are more likely to use BNPL during lockdown. However, out of those respondents who had noticed more BNPL offers popping up online, the number who would consider using such a credit scheme jumps to almost a third (32%), demonstrating how tempting these online campaigns can be.

The FCA recently announced a three-month interest payment freeze for individuals using BNPL schemes and facing financial difficulties due to COVID-19. However, concerns remain around how easy people find managing their debt and staying on top of payments once they have used these schemes.

Results of research carried out by before lockdown demonstrated that nearly half (45%) of those who used a BNPL scheme in the last year had missed at least one payment. A similar number (48%) said they had incurred additional fees for a missed payment, and 56% said that missing a BNPL payment resulted in them being unable to pay back other debt payments, such as credit card bills, loan repayments or overdraft fees. Following a missed payment, over half (55%) said they did not wish to use the scheme again.

John Crossley, Head of Money at, sid “Keeping control of household finances will likely be front of mind for many people during this difficult time. Our research suggests that young people in particular may be turning to alternative credit schemes at a time of growing economic uncertainty. There remain serious concerns, however, over some people’s ability to keep track of their debt and prevent bills from racking up.”

“The latest payment freeze announced by the FCA on Buy Now Pay Later purchases is welcome news for those struggling with keeping on top of current payments. Fees and interest terms differ between BNPL providers, but customers should be aware that interest on purchases will still accumulate during the payment freeze and will be payable after the three-month break. If you are struggling financially there are dedicated services to provide help, including money management services and debt charities which offer free confidential advice.”