Six-fold rise in Buy Now, Pay Later debt shows clear need for regulation

Our National Debtline service has seen a six-fold increase people struggling with Buy Now, Pay Later debt, up from just 3% of people seeking support in 2021 to 18% in 2026.

Posted July 15, 2026

Our National Debtline service has seen a six-fold increase people struggling with Buy Now, Pay Later debt, up from just 3% of people seeking support in 2021 to 18% in 2026, with the average debt now standing at £1,029. The new figures are further evidence of the importance of new Financial Conduct Authority (FCA) regulations due to come into force on July 15th. 

The changes will introduce important safeguards including affordability checks, clearer information about borrowing, greater support for people experiencing financial difficulties and access to the Financial Ombudsman Service for complaints about regulated BNPL agreements. 

Steve Vaid, Chief Executive at Money Advice Trust, said:  

“Buy Now, Pay Later users have been left without adequate protections for too long. The rapid growth in number of problems we see shows how desperately these reforms have been needed.  

“Bringing BNPL in line with other forms of credit is a vital step to ensuring that people can’t build unsustainable levels of debt, that they get better support if they are in financial difficulty and have better routes to complain when things go wrong. The ultimate test of these rules will be whether our advisers start seeing fewer people struggling with BNPL debts.” 

More vulnerable and younger consumers disproportionately affected  

Our National Debtline data shows that people struggling with BNPL debt supported by the service often face wider challenges, suggesting that BNPL products may be causing greatest harm to people on lower incomes and people less able to manage drops in their income.  

Of our clients with BNPL debt: 

  • Almost two-thirds (63%) have disclosed an additional vulnerability, such as a health or capability condition.  
  • Just 30% are in full-time employment, while a further 13% are in part-time work and 17% are currently unable to work because of long-term sickness or disability.   
  • Nearly half (46%) of people with BNPL debt are aged under 34, including 13% who are under 24. 
  • People with BNPL debt are also more likely to be female, and either renting or living with family and friends.  

The lack of regulation has meant people have been able access BNPL credit without robust affordability assessments, increasing the risks of people with lower financial resilience taking on borrowing that is ultimately unsuitable for them. 

Tim’s story: "I hid it from my wife" – how £24,000 of debt left me fearing every bill 

Tim built up around £24,000 of debt, including BNPL borrowing, after using credit to fund spending he believed he would be able to repay later, as he was in full-time employment in the construction industry. 

When a health condition meant he had to stop working and the number of repayments increased, the pressure on his finances intensified. Tim said he became consumed by worry about money and increasingly anxious every time a payment was due. 

Unable to face the scale of the problem, he kept the extent of his debts hidden from his wife and tried to manage the situation alone. 

What had started as a series of manageable payments eventually became a source of constant stress and sleepless nights. 

“There were moments where it felt overwhelming. I’d seen people in my working life take their own lives. I understood how someone could get to that point. And I did have thoughts about just stepping away from it all. But I knew I couldn’t do that to my wife. I couldn’t leave her with the mess.” 

After contacting National Debtline for support, Tim was able to understand his options and begin tackling his debts. 

“I don’t think I’ll ever properly be able to describe how that felt. Weightless is the best word I’ve got. Like something massive had just been lifted off me. Euphoric. Genuinely euphoric. I sat there thinking, I can breathe again.” 

His experience highlights how quickly BNPL borrowing can accumulate when consumers have multiple agreements running at the same time, particularly when combined with other forms of credit. 

New protections are welcome, but risks remain 

National Debtline is encouraging consumers to understand the limits of the new protections. 

Not every BNPL product will be covered: Some retailers' own in-house instalment arrangements are expected to remain outside the new regulatory framework. Consumers using these products may not benefit from the same protections available through regulated third-party BNPL providers. 

Existing agreements may not be protected: The new rules will only apply to agreements taken out after regulation comes into force. Consumers experiencing problems with older agreements may not have access to the same rights and protections.  

Some consumers may be declined: Lenders will now be required to carry out affordability and creditworthiness assessments before offering BNPL credit. This means some consumers who may previously have been approved could now be declined. While this may be frustrating, it is intended to prevent unaffordable borrowing. 

BNPL can affect your credit record: Consumers should be aware that some lenders may carry out checks that leave a footprint on their credit file, while BNPL borrowing and missed payments are increasingly being shared with credit reference agencies. Taking out multiple agreements or missing repayments could affect a person's ability to obtain credit in future. 

Fees and consequences remain: The new rules do not remove the consequences of missed payments. Consumers who fall behind could still face charges from lenders and damage to their credit records.

Jack Sporcic, debt adviser at National Debtline, says: 

“We are urging consumers to treat Buy Now, Pay Later in exactly the same way as any other form of borrowing. 

Before agreeing to Buy Now, Pay Later, people should ask themselves: 

  • Can I comfortably afford the repayments? 
  • Am I already relying on borrowing to cover essentials? 
  • Do I have other Buy Now, Pay Later agreements outstanding? 
  • Could my financial circumstances change in the near future? 
  • Could I save up and make the purchase later instead? 

“We often see people using Buy Now, Pay Later for everyday essentials such as food, energy bills and household basics. People who are already struggling with debt, juggling multiple Buy Now, Pay Later agreements or facing uncertainty about their finances should think particularly carefully before taking on additional borrowing. 

“As with any form of credit, people should consider whether they could afford the purchase without borrowing at all. 

“Anyone worried about Buy Now, Pay Later borrowing or any other debts can get free, independent advice from National Debtline.” 

National Debtline also provides a free guide to understanding and using Buy Now, Pay Later safely.