Creditspring’s recent research reveals a significant reliance on BNPL services among young people in the UK, particularly for managing Christmas expenses.
The study shows that 23% of young individuals planned to use BNPL for their Christmas dinner, and 28% of 18-34 year olds intended to buy gifts using this unregulated borrowing method.
The Financial Conduct Authority’s (FCA) research complements these findings, indicating that frequent BNPL users are more prone to financial difficulties, such as increasing debts or missed bill payments.
Creditspring’s data further underlines this trend, revealing that 22% of 18-34 year olds who have used BNPL previously ended up in debt. Additionally, a significant portion of young people appear to be unaware of the consequences of missing BNPL payments, with 32% not knowing it could lead to debt collection.
The festive season’s financial pressures are particularly acute for younger demographics, with 42% expressing heightened financial worries this Christmas compared to previous years. Furthermore, 30% anticipate that Christmas expenses will push them into debt, and 21% are considering using BNPL for the first time to cope with these costs.
Neil Kadagathur, CEO and Co-Founder of Creditspring, emphasizes the challenges faced by many due to added financial pressures during the festive season. He points out the risks associated with unsafe borrowing methods like BNPL, especially for those without a financial safety net.
Kadagathur stresses the need for swift government action to regulate BNPL lending and advocates for safe, affordable, and transparent credit options. He highlights Creditspring’s role as an FCA-regulated credit subscription service, offering a responsible and clear alternative with fixed fees, capped costs, and no hidden charges.
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