Buy now pay later schemes causing 36% of millennials “financial stress”
Buy now pay later schemes are causing over a third of UK millennials to experience financial stress after being encouraged to spend money they don’t have.
Hastee’s annual Workplace Wellbeing Study has found that 56 per cent of millennial workers say buy now pay later schemes, which allow customers to stagger payments of a purchase over a number of instalments, encourage them to spend money they may not be able to afford.
Across all age groups who have used the increasingly popular scheme, 27 per cent said they had experienced financial stress after doing so.
Millennials were once again hardest hit, with 36 per cent stating they experienced financial difficulties after making a buy now pay later purchase.
Of those, half said this affected their social lives, 40 per cent said this affected their relationships, and 39 per cent said it impacted their health.
Schemes like this have taken the retail industry by storm over the past year, with big brands including Marks & Spencer, Samsung, H&M, River Island and Boohoo all launching programmes in the past few months.
“Buy now pay later schemes might seem an attractive option for consumers but they’re proving to be as problematic as more traditional forms of credit,” Hastee said.
Its chief executive James Herbert added: “While they seem like a good short term solution, they can cause consumers issues in the longer term.
“Missed payments can impact credit scores, cause longer term debt problems and could create an unhealthy reliance on credit cards and overdrafts as users struggle with repayments.”