Europe Intelligence Paytech

Without BNPL, Over 1 in 4 UK Customers Do Not Believe They Could Afford Christmas

Equifax, one of the UK’s big three credit reference agencies, has released its findings on how UK shoppers are approaching BNPL as we near the end of the year and the festive season. More than a quarter (28%) of shoppers are now regularly using Buy Now Pay Later (BNPL) services to spread the cost of purchases, and this figure is only going to grow as more people find the service necessary in order to ‘afford Christmas’.

A record 28% of the adult population had at least one BNPL repayment leave their current account in October 2021, up from 23% in December 2020, suggesting that 2.6 million more people are now using BNPL than at the start of the year. The payment deferral service, popularised by providers such as Klarna, Clearpay, and PayPal, allows customers to spread the cost of retail purchases over a number of weeks or months, often with no additional interest.

BNPL’s popularity has jumped in recent months, recently inviting scrutiny from the Treasury and FCA, but Equifax’s data shows that the total sum borrowed by each individual has risen far less dramatically. The average user made £125.32 of BNPL repayments last month, just £5 higher than the £120.35 in December 2020, broadly in line with inflation. The average number of monthly transactions also grew slightly, fluctuating around 5.02 in 2021, and hitting 5.76 last month.

Jayadeep Nair, Chief Product and Marketing Officer at Equifax UK, said, “BNPL is not a new concept, it’s been part of the UK’s credit industry for decades, but it has taken on new forms in recent years that has sent its popularity soaring. For switched on shoppers that want to smooth out their spending over the festive period, it can be an incredibly useful budgeting tool, and may soon even help those with thin credit files to build up a healthy credit score.

“However, as useful as BNPL can be, it’s important that shoppers don’t see it as a way to overstretch themselves in the coming weeks. Prices are rising, interest rates are creeping up, and unless wages keep pace, most borrowers will see their finances squeezed over the coming months. The message to shoppers considering using BNPL at the checkout is clear: are you sure you can make the repayments on time? And could you have afforded this purchase without BNPL?”

black friday sale


Black Friday and Cyber Monday

Equifax’s research found that more than 1 in 10 (16%) shoppers expect to use BNPL over the festive period, with Black Friday being a major focus this year. 10% expect to use BNPL for at least one of their purchases this weekend, more than double the 5% that ended up doing so last year.

Those most likely to use BNPL this Black Friday and Cyber Monday weekend include young people aged 18-34 (23%), and people earning more than £50k per year (23%), especially those with the security of full-time income, one in five (18%) of whom expect to use it this Friday. One in seven (14%) BNPL users say it will help them make the most of the sales when one month’s salary won’t stretch far enough, while one in four (27%) like having the ability to splash out now, and only pay for items they decide to keep.


Christmas is also a major driver of BNPL use, with 9% of Xmas shoppers last year using BNPL to spread out the cost of presents. The number expecting to do so next month has risen to 11% and may end up being higher once all is said and done. Once again it is 18-34 year olds that are expected to lead the charge, a quarter (25%) of them plan to use BNPL this Christmas, compared to 10% of 35-54 year olds and just 2% of over 55s.

Despite it being people earning above £50k, and those with at least one full time job, that say they are most likely to use BNPL this Christmas, 18% and 13% of these audiences respectively, there are signs that the social pressures of Christmas are fuelling BNPL use. One in five (22%) people planning to use BNPL say they feel pressure to buy presents for family and friends, and over a quarter (27%) say they would struggle to afford Christmas without its help.

Jayadeep Nair, Chief Product and Marketing Officer at Equifax UK continued, “The research shows that more and more people are using BNPL, and while early signs suggest that individual use of BNPL remains relatively constant, it’s important that new users are aware of the risks of mismanaging their repayments.

“Two in five users report missing at least one payment in the past, and half of them say they have been hit with extra fees as a result. While it’s great to see consumers offered a more convenient way to shop in our modern times, BNPL is still a form of borrowing, and it’s important we don’t lose sight of that.”


  • Francis is a journalist and our lead LatAm correspondent, with a BA in Classical Civilization, he has a specialist interest in North and South America.

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