Research launched into 'buy-now-pay-later' Christmas debt crisis
Over the past five years Swansea University's research has revealed that the BNPL option is most appealing to Millennials and Generation Z
With Christmas fast approaching, shoppers are being tempted by promotions, festive adverts and the convenience of buy-now-pay-later schemes (BNPL) to make purchases they might not be able to afford outright.
These deferred payment services are becoming increasingly popular, particularly with online shoppers.
BNPL could lead to financial difficulties, particularly for Millennials and Generation Z
To explore this issue, a new research project led by Swansea University aims to better understand how consumers manage the payments and to create resources to help those most at risk of falling into debt.
Dr Anita Zhao from Swansea University said:
“This project will see us create a toolkit to help financially vulnerable or overindebted BNPL users in South Wales and beyond.
"We don’t know yet what form these tools will take, but we aim to gain a better understanding of how we can work with debt advisors and those in debt to provide the right kind of support.”
The research team is appealing for input from both individuals who have experienced BNPL-related debt and financial debt advisors as part of their study.
Dr Zhao highlighted concerns about the unregulated nature of BNPL in the UK:
“Many buyers feel they are merely using their own future money for the purchases and don’t think of it BNPL as a form of credit.
"The problem is BNPL is currently not regulated in the UK. Unlike a credit card where a lender receives a monthly statement for all their spending, BNPL is used for individual transactions so a shopper may have made numerous purchases that all require payment of different amounts at separate times.
"Unless you are financially aware, it is easy to lose track of spending”
"This can become very messy. Unless you are financially aware, it is easy to lose track of spending.”
The researchers are conducting surveys and collaborating with organisations such as the Money Advisory Liaison Group (MALG) to improve support for those experiencing financial issues. They are also drafting consultations regarding new regulations planned by the Financial Conduct Authority (FCA) for 2026.