Shoppers turning more to buy now, pay later schemes, survey finds
More than a third (35%) of people are turning to buy now, pay later schemes more often now than before the coronavirus pandemic, a survey has found.
The survey also revealed that more than half (54%) of 18 to 24-year-olds said they have used buy now, pay later schemes more frequently since the crisis started.
More than a quarter (27%) of people who have used such a scheme in the past 12 months said they did so because they could not afford to make the purchase outright at the time.
One in six (15%) people now use the schemes for all purchases where the option is available, the survey for comparethemarket.com found. This is up from 4% who said this when a similar survey was carried out at the end of 2019.
Buy now, pay later (BNPL) schemes allow people to spread the cost of purchases over a longer period.
Young people are the demographic most likely to use BNPL schemes. More than half (54%) of those aged 18-24 say they have used BNPL more since the pandemic began and nearly a fifth (18%) say they have missed at least one repayment in the last 12 months – which is double (9%) the number of those who had in December.
John Crossley, head of money, comparethemarket.com, said: “As a result of the pandemic, more people have turned to online shopping, contributing to a marked uptick in the use of buy now, pay later schemes.”
He said while schemes can help people manage their finances, “as people use this type of credit more frequently and for larger payments, it is probable that some people will spend beyond their means at a time of unprecedented economic uncertainty”.
Crossley said a potential alternative could be a credit card offering 0% interest on purchases for a limited period, he said.
More than 2,000 people across the UK were surveyed in October.