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BNPL: Postponing Stress and Pre-empting Debt

According to recent research by, the average time UK shoppers say it will take them to clear their BNPL debts is now nine months.

This, along with recent revelations that 18-24 year-olds are more likely to use ‘buy now, pay later’ services than a credit card, is a worrying depiction of how these services might be negatively or immorally influencing the financial decisions of younger generations.

Over half (54%) of Brits use BNPL services such as Klarna and Clearpay, and the success of these more popular services are inspiring more and more similar services to pop up and target vulnerable consumers.

However, there are questions to consider about where the responsibility lies when it comes to spending through BNPL schemes, as despite the obvious negatives of these services, there is a place for them in the FinTech market.

A birds eye shot of an open laptop, a clip of money, a small shopping trolley and a light-box that reads 'black Friday sale'.

What are the pros and cons of BNPL services?

BNPL services are an alternative form of lending that allows consumers to do exactly what it says on the tin - purchase and receive an item/s now, and pay for it later.


  • Able to purchase and receive items, even if you don’t currently have the money.

  • Able to wait until payday to pay back any money owed.

  • Very convenient and easy to use.

  • No limit on the amount of times you can use it.


  • Feeling like the items are ‘free’ and subsequently overspending as a result.

  • Underestimating how much you owe, and getting into a debt cycle when you have little left on payday.

  • Some BNPL schemes aren’t clear about the potential risks/consequences of not paying back on time.

  • Missing payments can result in impacts to credit score.

  • Missed payments could result in added interest.

  • Could lead to problem debt as a result of not keeping up with payments.

  • Can promote impulsive spending and instil problematic financial habits.

As highlighted above, there are several more ‘cons’ than ‘pros,’ and this, primarily, is due to the imbalance between the positive and negative outcomes of using BNPL services.

Yes, it is convenient and accessible.

Yes, it allows those who don’t yet have the money to make purchases.

However, the implications that could potentially arise as a result of spending ‘beyond your means’ through BNPL services are damaging. It’s also important to remember that the majority of the time, purchases through BNPL are based on wants, rather than needs.

What is the money being spent on?

Stereotypes would point to the majority of BNPL expenditure being on fashion (clothes and shoes). However original research conducted by Freeze Debt in 2020 revealed the following statistics around what people are using BNPL services for:

  1. Tech (26%)

  2. Travel (21%)

  3. Clothes and shoes (19%)

  4. Interiors (15%)

  5. Gaming (14%)

  6. Health and beauty (14%)

  7. Sports (11%)

Rising popularity of the BNPL model seems to have taken off across a number of industries and seems to be indicative of a monopolisation of the retail market, especially following promotion of schemes through clever targeted advertising.

These tactics include promotion through social media and celebrity influencers, e-commerce websites setting BNPL services as a default payment option, and purposefully seeking to address a younger audience with celebrity partnerships, investments and endorsements.

Shockingly, 60% of the UK do not regard money owed to Buy Now Pay Later services as ‘real’ debt, with a significant fifth (20%) of Gen-Z and Millennials believing it is ‘different to credit card debt’. Additionally, despite the detrimental impact of poor financial habits, almost half (46%) of Brits state they don’t know or care whether such services are FCA regulated.

Some good news, however, is the FCA’s ongoing investigation of BNPL schemes as a result of author and financial influencers, Alice Tapper’s, campaign for regulation around these schemes.

BNPL, Debt and Mental Health

Poor regulation by governing bodies such as the FCA and Insolvency Service, as well as lacklustre background checking from BNPL services are doing a disservice to those who use them, and can lead to more than just financial problems as debt builds and becomes more and more unmanageable.

Almost one in five (19%) of shoppers admitted that the use of BNPL services is a way to ‘buy now, worry later’ which has risen by over a quarter (26%) since last year. The admission from shoppers that these services essentially allow them to postpone their stress is extremely troubling, and highlights the mental effects that poor money management and debt can have on a person.

Harjit Moore, CEO and founder of Freeze Debt, commented:

“Our research shows that although these BNPL services look attractive and seem like a good idea at the time, they are having a huge impact on the nation’s mental health by irresponsibly facilitating unsustainable spending habits. We’re seeing this particularly amongst the younger Gen-Z and Millennial generations, with younger spenders spiralling into more debt as a result.”

Can BNPL be a good thing?

Some people have argued that as long as you know what you’re getting into and can pay it back, BNPL schemes are okay to use.

Antonia Lock, Head of Strategic Initiatives at Nude, said:

“If you’re a low income family and you need a new washing machine and you understand the risks and paybacks and all that kind of thing, then it’s a good thing.”

In cases where the purchase is necessary, like the example stated above, BNPL services could be a better option than high-interest finance or loan rates, but should be considered alongside all potential options before making a decision.

However, regardless of the potential benefits or positives of BNPL schemes, it’s important for those using them to develop a true understanding of the risk it poses to their own finances and mental health, and use this to inspire a decision rather than spending impulsively, or selecting the ‘easiest’ option.

For more about the good, bad and ugly around BNPL schemes, and to hear more opinions on the ‘State of the FinTech Industry,’ check out our recent panel discussion here, which featured a number of experienced and knowledgeable figures in the FinTech and debt industries.


About Freeze Debt

Freeze Debt is the first debt advice and solutions app helping UK users to take their first steps towards a debt-free future. Our free service provides those struggling with unmanageable debt a confidential space to speak openly about their debt and financial worries and find a suitable solution based on their personal circumstances.

Freeze Debt's in-app messaging service is a revolutionary and modern way for users to address their debts and find solutions in less than 5 minutes, compared to the traditional and uncomfortable ‘call-centre-model’ that can take an average of 45 minutes.

So far, we’ve helped clear over £30m of debt and helped many people begin their journey to a debt-free future.


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