As the UK Government announces regulations on Buy Now, Pay Later (BNPL) services to help protect consumers, new research from TransUnion UK reveals over eight million Brits are using BNPL for items under £50, and 4% put purchases under £25 on this short-term credit.

Over a quarter (26%) of UK adults now prefer to use BNPL over credit cards for everyday spending, with 18 to 24-year-olds (20%) most likely to rely on this short-term credit for ‘bitesize’ purchases. One in ten (10%) consumers pay for their weekly shop with BNPL, while a similar number spread the cost of takeaways (9%) and coffee drinks (7%).

Madhu Kejriwal, CEO of TransUnion in the UK and Europe, said: “Consumers have embraced the broader choice buy now, pay later services offer. They’re generally easy to use as they provide a good consumer journey and can additionally be a useful option for people with more limited credit opportunities. With its rising popularity, new regulation on BNPL is a positive and timely step to help protect consumers from taking on more debt than they can repay and supports responsible lending.”

Ahead of the new school year, 6% of Brits are turning to BNPL for school supplies – rising to 15% among younger parents between 25 and 34 years old. However, nearly two in five (19%) adults who buy school equipment with BNPL say they are financially comfortable, suggesting that for some at least, it’s a choice of convenience, not necessity. Plus, as petrol prices continue to rise, 7% of Brits are paying for fuel with BNPL, while 8% rely on it to cover essential travel and commuting.

As inflation continues to exceed the Bank of England’s target of 2%, rising to 3.5% in April 2025, up from 2.6% in March nearly a quarter (23%) of BNPL users put low-cost purchases on short-term credit to manage the rising cost of living. One in seven (14%) use ‘bitesize’ BNPL for budgeting, with this highest among 45 to 54-year-olds (20%), and 13% rely on this payment method to afford essential items.

Being easy to use (60%) and widely available (34%) are driving BNPL’s popularity, but for 16% of consumers, BNPL is their preferred form of short-term credit as it requires fewer credit checks. In fact, 8% have turned to BNPL after having a credit application declined by a mainstream lender.

Kejriwal added: “BNPL can be a quick way to access credit, and while using short-term financing for smaller purchases isn’t a cause of alarm, missed or late payments, even for low-cost items, are visible on your credit report and may negatively impact future access to credit. Ahead of regulations, it’s key that consumers understand how BNPL loans can affect their credit report. At TransUnion, we have a comprehensive view of consumer behaviour and affordability, helping businesses lend responsibly and consumers better understand their credit commitments.”

While upcoming regulations are expected to enforce affordability checks and require BNPL loans to be reported on credit files, there’s low awareness of how short-term financing can impact your ability to borrow money in the future. More than one in eight (13%) BNPL users are unaware of how using short-term financing for everyday expenses can affect their credit report and 7% admit to missing or making a late repayment for a small purchase.

For consumers using BNPL, or considering using it, for small everyday purchases, TransUnion offers some tips:

• Before taking out a BNPL loan, check the terms and conditions, including when you need to pay the money back and if any late payment fees apply. Missed or late payments – regardless of the amount – can be reported to credit reference agencies and negatively impact your credit report
• Small purchases on BNPL can quickly add up so keep track of how many BNPL accounts you have open. To avoid missing repayments, set reminders or enable automatic payments
• Regularly monitoring your credit report can help you feel more in control of your finances, as well as to understand and help protect your financial standing and know what kind of finance you’re potentially eligible for. You can view your TransUnion credit report and score for free with providers such as Credit Karma, MoneySuperMarket, or TotallyMoney, or you can obtain your free statutory credit report from TransUnion’s website. Additionally, many consumers can freely access their credit report via the mobile apps and websites of high street banks and lenders.
• If you’re struggling to pay off debt, don’t ignore bills or letters about money you owe. Speak to your lender for support or get free, confidential and independent debt advice from charities such as StepChange Debt Charity and National Debtline