Brits are set to owe billions of pounds in the new year after using buy now pay later (BNPL) schemes to fund festivities.
According to analysts, customers are predicted to spend nearly £4bn using BNPL lenders over Christmas, making it 8.8% above 2022.
This will take the total amount spent this year to £17bn, pushing it up over a quarter compared to last year.
Campaigners have warned customers “need to think hard before using BNPL” as fears arise over looming January debt.
The warning comes as pressure builds on ministers to speed up new rules for the industry after regulation plans were announced three years ago.
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Helen Ganney, from the debt charity Christians Against Poverty, said: “Buy now, pay later can seem an attractive way to afford all the things we’d like to buy at Christmas – but the ‘later’ part comes around quickly and will need to be paid back.
“It is worrying that these products are not currently regulated by the Financial Conduct Authority, as other lenders are.”
Recent research from Adobe Analytics found shoppers are set to spend £3.7bn through companies like Klarna, Laybuy and Clearpay this Christmas, taking the total to over £17bn in 2023.
According to This Is Money, ministers promised to regulate the industry in 2021 and published draft legislation earlier in the year. However, the new rules have not yet been implemented.
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