Latest analysis of Bank of England data has found that around 3.1 million households owe £2.7 billion in buy now, pay later (BNPL) borrowing.
Research by Bank economists Gerry Gunner and James Waddell looked at a survey from March 2023 and found that 11% of UK households reported owing money on BNPL. The average balance was £866, meaning a total of £2.7 billion is owed.
The study showed that 68% of BNPL users are concerned about their borrowing, compared with 45% of other borrowers. The figures also show that they are also more likely fall behind on repayments by two months or more.
Rocio Concha, Director of Policy and Advocacy at consumer group Which? believes regulation is needed to protect BNPL borrowers, she said “With several providers not offering clear information of the risks attached to using BNPL. Some consumers are entering into agreements without the full picture.”