Half of British Zoomers regret using unregulated BNPL products: reason unveiled

2,000 BNPL users across the UK have been polled

BNPL

Half of British Zoomers regret using unregulated BNPL products: reason unveiled. Source: pexels.com

According to the research, almost 4 in 10 younger shoppers spent more than they anticipated in the Christmas and January sales using unregulated BNPL loans, compared to 1 in 3 on a national scale.

As a result, this spending has left Gen Z BNPL users with an average of £175.50 in monthly repayments, which they’re using 20% their monthly discretionary income to pay off.

And while 44% are left feeling overwhelmed by their repayments, 29% doubt their ability to pay back what they have borrowed. Almost 1 in 12 have already been contacted by debt collectors, 12% have seen their credit score impacted, and half regret using unregulated BNPL altogether, because they ended up buying more than they could afford to repay.

The products most commonly bought by Gen Z-ers using BNPL are ‘everyday fashion’ items (35%) and beauty products (26%).

Barclays’ research shows that close to 7 in 10 18-24-year-old users of unregulated BNPL products have racked up debts across multiple providers simultaneously. Interestingly, 59% of those having had agreements in place with three or more providers at the same time.

Rising inflation and energy bills are contributing to the growing cost of living crisis. This makes it much harder for consumers, particularly those in financially vulnerable groups, to stay on top of spending, and many are drawn to BNPL as a way to maintain their current lifestyle. As things stand, newer BNPL products are not subject to the same regulation as more traditional credit agreements. With many providers, consumers are not even given a detailed affordability assessment, and the credit reference agencies are given no visibility of the loans that are dished out. That’s a problem, because it allows consumers to get into unmanageable and overwhelming levels of debt, an issue that our research shows is hitting Gen Z shoppers particularly hard
Antony Stephen, CEO of Barclays Partner Finance

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