Buy Now Pay Later debt hits record levels before new lending rules take effect

New data from Money Wellness has shown that Buy Now Pay Later (BNPL) has become an increasingly common feature of customers’ finances over the past four years, with June recording 4,520 customers seeking help with BNPL debt – the highest June on record and second only to the traditional post-Christmas spike seen in January.

The figures come ahead of new regulations taking effect on 15 July 2026, which will bring Buy Now Pay Later lenders under the same regulatory framework as many other consumer credit products.

The changes mean lenders will be expected to carry out more robust affordability checks before approving customers, provide clearer information about how BNPL works, and offer stronger protections if people experience financial difficulty. Consumers will also be able to escalate unresolved complaints to the Financial Ombudsman Service.

Money Wellness says the changes are a positive step for consumers, but they could also mean some people who have always been approved for BNPL are declined for the first time. Rather than seeing this as simply an inconvenience, the organisation says it may be an important warning that someone’s finances are becoming stretched.

For many people, Buy Now Pay Later is a useful way to spread the cost of purchases and manage cash flow. Many providers have also strengthened affordability assessments and introduced additional support for customers showing signs of financial difficulty ahead of regulation.
However, Money Wellness’s data suggests that some households are becoming increasingly reliant on BNPL as everyday budgets come under pressure.
The proportion of customers seeking advice with at least one BNPL debt has increased from 15% in 2023 to 25% in 2026.

At the same time, the average number of BNPL accounts held by those customers has doubled from 1.4 to 2.8. While the average amount owed has fallen from £636 to £251, the figures suggest people are increasingly spreading smaller purchases across multiple BNPL agreements rather than using the product for occasional high-value items.

Young adults appear particularly exposed. Customers aged 18 to 24 are twice as likely to have a BNPL account as older age groups, yet are around half as likely to have received financial education at school.

Matthew Sheeran, External Relations Manager at Money Wellness, said “Buy Now Pay Later has become part of everyday life for millions of people, and for many it can be a helpful way to budget and spread the cost of purchases.

“The new regulations are good news because they’ll give consumers greater protection and help ensure lending is affordable. Our concern isn’t Buy Now Pay Later itself. It’s what can happen when people begin relying on multiple forms of credit simply to make ends meet.

“Our data shows more people are holding several BNPL agreements at the same time, even though each individual purchase is for a relatively small amount. That can make it much harder to keep track of repayments.”