Concern is growing over hard-pressed families who are being tempted to spread the cost of essential bills by using buy now, pay later (BNPL) credit. Households struggling with surging energy and spiralling food prices are being tempted as the cost of living crisis deepens, according to consumer groups.
Energy and debt advice groups have warned the “really worrying” development is a sign that individuals and families are having to resort to increasingly “desperate” measures to cover basic expenses, and the top financial watchdog, the Financial Conduct Authority, has issued a warning over their use as data revealed Brits are turning to the products to ease the pain.
The FCA, which announced a clampdown on the BNPL sector last month, has said soaring inflation underlined the need for regulation of BNPL products, which is unlikely to come into force until next year. BNPL is a type of short-term financing that allows consumers to make purchases and either delay the whole bill or split the cost into a clutch of equal instalments, interest-free.
