Table of contents

Buy now, pay later (BNPL) is now a common payment option at online and in-store checkouts. It is often used for clothing, homeware and everyday spending, as well as larger purchases. Used carefully, it can help spread the cost of an item. But BNPL is still a form of borrowing, and repayments can become difficult to manage if several plans are running at once. This guide explains what BNPL is, what to watch out for, what is changing from 15 July 2026, and how to stay in control.

What does buy now, pay later actually mean?

Buy now, pay later is a way to spread the cost of a purchase into smaller instalments, usually over a few weeks or months[1]. Some plans are interest-free if payments are made on time, which can make a purchase feel easier to manage because the full amount is not paid up front[2].

However, BNPL is credit. Depending on the provider and agreement, missing a payment may result in fees, collection activity, or reporting to credit reference agencies. Some longer-term or interest-bearing instalment products may also charge interest, so it is important to check the terms before agreeing.

What’s the current scale of buy now, pay later?

PayPlan data shows that, among clients using BNPL, recorded BNPL usage increased by 3,793% between 2020 and 2025. In PayPlan’s client data[3]:

  • Men accounted for 51% of BNPL accounts and women accounted for 41%; gender was unknown or not shared for the remaining 8%.
  • For people using BNPL, the average number of accounts increased from 1.25 in 2020 to 1.91 in 2025.
  • In 2025, 66% of BNPL users in the data had one account, 20% had two accounts, 5% had three accounts, 3% had four accounts, and 6% had five or more accounts.

What are the risks of falling behind with BNPL payments?

Before using BNPL, it is worth checking how repayments will fit alongside your usual bills and spending. Key risks include[4]:

  • Impact on your credit file: BNPL is a form of credit. Depending on the provider and the agreement, missed payments may be reported to credit reference agencies and could make it harder or more expensive to borrow in future.
  • fees: Some providers charge late fees or other costs if you miss a payment, so always check the terms before agreeing to a plan.
  • Multiple repayment dates: Using several BNPL plans at once can make it harder to track what is due and when, especially if payments fall close together.

New BNPL protections begin from 15 July 2026[5]

From 15 July 2026, the Financial Conduct Authority (FCA) will start regulating buy now, pay later agreements where the credit is provided by a third-party lender rather than directly by the retailer. Agreements entered before 15 July 2026 will remain outside the new rules.

For eligible BNPL agreements entered on or after 15 July 2026, lenders must comply with FCA rules. This includes clearer information for clients, proportionate affordability checks, support for people in financial difficulty, and the ability to complain to the Financial Ombudsman Service if the lender does not resolve a complaint.

Before an eligible agreement is entered into, lenders should provide clear information, such as:

  • The amount of credit and the cash price of the goods or services
  • The number, amount and timing of repayments
  • Any fees, charges or consequences of missed payments
  • Information about client rights and how to complain
  • Support options if a client is in, or approaching, financial difficulty

What should you do if you choose to use buy now, pay later?

If you use BNPL, a little planning can help you stay in control. You could try:

  • Adding repayments to your budget: Include BNPL payments with your regular bills so you can see what is due and when.
  • Checking the total cost before you agree: Make sure you understand the repayment dates, any fees, and what happens if you miss a payment.
  • Avoiding too many plans at once: If current repayments are already stretching your budget, it may be best to pause before using BNPL again.
  • Getting in touch early: If you are worried about making a payment, contact the provider as soon as possible and ask what support is available.

We’re here to help

If BNPL repayments are starting to feel stressful, you don’t have to handle it on your own. At PayPlan, our advisers can talk things through with you and help you understand what support could be available.

Our advice is confidential and non-judgemental, so you can chat through your options in a way that feels comfortable for you.

If you’d like to find out what help is available, please get in touch:

Get free debt advice online or call 0800 316 1833 to speak to one of our experts.

PayPlan’s advice is free, but some solutions may involve fees.

[1] What is Buy Now Pay Later? | MoneyHelper

[2] Buy now, pay later: how to use it without getting into risky debt | Buy now, pay later | The Guardian

[3] Buy Now Pay Later trends in the UK.pdf

[4]  Buy Now, Pay Later Debt Help – BBC

[5] Buy Now Pay Later | FCA