EMBARGOED UNTIL 00:01 on Friday 25 July 2025
New research highlights how BNPL’s ‘risk-free’ image is driving everyday spending habits that could lead to financial trouble for young adults.
MANCHESTER, UK. July 25th 2025 – Nearly half (43%) of young people who use Buy Now Pay Later (BNPL) believe it’s a risk-free way to spread the cost of spending, but new research from Money Wellness suggests it’s fuelling a growing reliance on short-term credit to fund everyday life.
The financial wellbeing provider surveyed BNPL users aged 18–28 and found that:
- 55% use BNPL to pay for holidays and festival tickets
- 54% use it to buy clothes
- 67% use it for one-off essential purchases
- 61% say it helps them budget
- 45% say it lets them enjoy luxuries they couldn’t otherwise afford
- 31% use it to cover the cost of essentials
- 14% use it for takeaways
- Nearly 60% are juggling 2–5 active BNPL plans at any one time, one in five have between six and 10, and 5% have over 15
While 88% say they’ve never missed a BNPL payment, most admit to using other types of credit alongside it, including credit cards (79%), overdrafts (30%), store cards (16%), car finance (17%) and personal loans (18%).
BNPL: blurring the line between money management and debt
BNPL has become part of day-to-day life for many young people, helping some manage their money, but creating risks when used without clear boundaries.
Sebrina McCullough, director of external relations at Money Wellness, said: “BNPL is often seen as a risk-free way to spend and it’s easy to understand why. Interest-free deals and simple sign-up processes make it feel more like a payment method than borrowing. But it is still credit, and when you’re using it on top of other credit or to fund a lifestyle you can’t afford, the risks start to build.”
Experiences now, pressure later
The findings suggest many young people are using BNPL to access experiences and items that would otherwise be out of reach. With long-term goals like homeownership becoming less realistic, some are choosing short-term enjoyment over saving.
Nearly half (45%) of those surveyed said BNPL lets them enjoy luxuries they couldn’t otherwise afford. For others, it’s seen as a budgeting tool, with 61% saying it helps them manage their money.
But relying on BNPL for clothes, trips and takeaways, without providers having to carry out affordability checks, is paving the way for money problems down the line for a significant number of people.
McCullough added: “What’s worrying is how embedded BNPL has become in day-to-day spending. Once you’re juggling multiple repayment plans and other debts on top, it can easily spiral. We often see people coming to us when they’re already overwhelmed, unsure where their money’s going each month.”
Regulation can’t come soon enough
Data from Money Wellness shows a 58% year-on-year increase in the number of people seeking help for BNPL debt, with outstanding balances averaging £711.
The government confirmed last week that it will bring BNPL under the regulation of the Financial Conduct Authority (FCA) from next year. The move will mean stricter affordability checks, clearer information for borrowers and stronger protections if things go wrong.
McCullough welcomed the move but warned that people could still get into trouble before the new rules are implemented: “Regulation can’t come soon enough as we’ve seen how BNPL can encourage spending without full appreciation of the risks. While we welcome the FCA’s involvement, the new rules won’t be in place for months. Until then, we’re urging people to approach BNPL with caution and make sure they’ve got a plan to repay.”
She added: “Used within affordable limits, BNPL can work for some people. But if you find yourself relying on it regularly or using it to cover everyday costs, it might be a sign that you need a bit of support. Reaching out for free debt advice or doing a quick budget review can help you feel more in control and plan ahead with confidence.”
ENDS