The Rise of Buy Now Pay Later in the UK: What’s Driving Its Popularity?

BNPL’s moment in Britain

Buy Now Pay Later has shifted from novelty to normal in the UK’s checkout flow. In 2025, an estimated 42% of UK adults have tried BNPL at least once, up from 36% in 2023, with roughly a third using it in the past year. Market forecasts point to strong momentum, with total BNPL spending expected to climb towards the high tens of billions over the coming years. In e-commerce, BNPL already accounts for about 6% of online purchases and could move into low double digits as adoption deepens. That places the UK among the most active BNPL markets globally.

Why the surge? Convenience, predictable instalments, and short-term plans that typically carry no interest are a powerful mix. Younger consumers drive much of the growth - around three quarters of users are under 36 - but older age bands are adopting BNPL where it helps smooth expenses. A growing share of transactions are small, everyday purchases, not just big-ticket items. Millions of adults report using BNPL for sub-£50 spends and a notable share lean on it to navigate cost-of-living pressures. This is reshaping the way households budget, with BNPL becoming a tactical tool rather than a last resort.

Credit preferences are shifting too. Around a quarter of UK adults say they prefer BNPL to credit cards for day-to-day spending, particularly those aged 18-24. The interface is familiar and fast, the repayment schedule is clearer than a rolling balance, and perceived friction is low. For merchants, BNPL often boosts checkout conversion and average order values, especially online where it is now embedded alongside card and wallet options. Major brands like Klarna, Clearpay, and PayPal anchor the market, competing on user experience, limits, and merchant reach.

Understanding APR is not the only metric that matters. With BNPL, the real question is how predictable your repayments are - and whether they fit your budget every month.

As usage climbs, scrutiny follows. The regulator is preparing proportionate rules for BNPL, and providers have tightened affordability checks. Missed payments can still trigger late fees and affect your credit standing. The takeaway is straightforward: BNPL can be a practical budgeting tool when used with discipline, but it is still credit. Treat it like any commitment that must be repaid on time.

Who benefits from BNPL’s flexibility

If you want predictable, short-term instalments without revolving interest, BNPL can be compelling. Younger shoppers value the low-friction checkout and clear repayment dates. Parents and mid-career households use it to spread the cost of essentials and seasonal spikes, from school uniforms to appliances. Online-first consumers, who expect rapid approval and instant checkout, are most likely to adopt.

For those building or rebuilding credit, BNPL may help demonstrate repayment behaviour with some providers, but this is not universal and outcomes vary. If you frequently carry over credit card balances month to month, a no-interest BNPL plan could be cheaper for specific, well-defined purchases. Conversely, if your income is irregular or your budget is already stretched, adding more commitments can introduce risk. The right choice is the one that keeps repayments affordable and your overall debt manageable.

Terms you will see at checkout

• Soft vs hard checks - Soft checks do not leave a visible footprint for most lenders; hard checks appear on your file. BNPL typically uses soft checks, but always read the provider’s policy.

• Interest-free period - Many plans split payments over 3-4 instalments at 0% if you pay on time. Longer tenures may introduce interest.

• Late fees - Fixed charges that apply if you miss a repayment. They can add up quickly for multiple missed instalments.

• Credit limit - The maximum BNPL spend available to you with that provider. It can adjust over time as you repay.

• Instalment plan - The number of repayments and schedule, usually every 2 or 4 weeks.

• Merchant fee - The fee a retailer pays the BNPL provider. Consumers do not pay this directly, but it enables interest-free offers.

• Section 75 coverage - Credit cards carry statutory protection for certain purchases; BNPL coverage varies by structure and provider.

Ways to use BNPL - and what to compare

1. Pay-in-3 or Pay-in-4 at 0% - Best for small, predictable purchases. Compare limits, late fee caps, and reminders. Check whether refunds automatically rebalance your plan.

2. Longer plans with interest - 6 to 24 months for higher-ticket items. Compare APR, early repayment options, and whether interest is deferred or charged from day one.

3. Virtual card or one-time token - Use BNPL anywhere cards are accepted. Compare acceptance rates, authorisation time, and privacy features.

4. In-app shopping journeys - Curated merchant lists, price drop alerts, and exclusive offers. Compare brand coverage, return handling, and dispute resolution speed.

5. Account-level BNPL with limit - A revolving-style BNPL account. Compare credit bureau reporting, rate tiers, and how your utilisation impacts your credit file.

Tip: Look beyond the headline 0%. Late fees, partial returns, and subscription renewals can complicate cash flow. Pick the plan that matches your pay cycle.

What it could cost and why it matters

Do you qualify - and what checks apply

Most BNPL providers operate lightweight eligibility checks, typically soft searches that look at identity, prior repayment history with the provider, and broad affordability signals. Approval is not guaranteed, and limits are often low initially, rising when you build a track record of on-time repayments. You will usually need to be 18 or older, a UK resident, and have a valid payment method. Some providers may request additional verification for higher limits or longer terms.

If you are applying for a longer BNPL plan with interest, expect a deeper assessment. Income stability, existing credit commitments, and your overall utilisation may be considered. Missed or late payments can reduce your limit or lead to account suspension. As regulation evolves, expect more consistent affordability checks across the market. The principle remains the same - credit should be affordable, suitable, and repayable within the chosen timeframe.

From checkout to cleared balance - the flow

1. Choose BNPL at checkout and review the plan details.

2. Complete a quick eligibility check with accurate personal information.

3. Link a debit card or bank account for repayments.

4. Receive approval and confirm your instalment schedule.

5. Pay the first instalment immediately if required.

6. Track due dates in the app and enable reminders.

7. Make payments on time or reschedule if allowed.

8. Confirm refunds are applied and plans adjusted.

Upsides and trade-offs at a glance

What to weigh before committing

Think about timing first. If your pay date falls a few days after instalments are due, you could incur late fees despite having the funds overall. Consider how many active plans you already have and whether new commitments overlap. If you are returning an item, monitor the plan until the refund lands, as instalments can continue in the meantime. Finally, reflect on the item’s useful life. Paying interest beyond its lifespan rarely makes sense. BNPL should support your budget, not stretch it.

Alternatives if BNPL is not the fit today

1. 0% purchase credit card - Promotional periods can be longer, with Section 75 protection. Requires discipline to clear before the promo ends.

2. Debit card with budgeting tools - Real-time balance visibility reduces overspending risk. Combine with savings pots for irregular expenses.

3. Personal loan through a broker - Fixed terms for larger purchases, predictable repayments, and clear APRs. Suitable for planned, bigger-ticket costs.

4. Overdraft arranged with your bank - Useful for short gaps, but interest and fees can be high if used regularly.

Frequently asked questions

Q: Will BNPL affect my credit score? A: Many providers run soft checks that do not impact your score. Missed payments may be reported and can reduce your score. Longer, interest-bearing plans may involve hard checks.

Q: Is BNPL cheaper than a credit card? A: For short, interest-free instalments paid on time, BNPL can be cheaper. If you incur late fees or choose a plan with interest, costs can exceed well-managed card borrowing.

Q: What happens if I return an item? A: Your plan is typically adjusted once the merchant confirms the return. Keep paying instalments until the refund is processed to avoid late fees.

Q: Which providers are most common in the UK? A: Klarna, Clearpay, and PayPal are widely accepted. Features, limits, and credit reporting vary, so compare before you commit.

Q: Is BNPL regulated in the UK? A: Proportionate regulation is in development. Many providers already follow conduct standards and affordability checks, but protections differ from traditional credit.

Q: Can BNPL help during the cost of living squeeze? A: It can smooth cash flow for essentials, but only if repayments are affordable. If money is tight, consider alternatives or seek free debt advice.

Ready to move thoughtfully

If BNPL suits your spending pattern, set reminders, align instalments with your pay cycle, and keep active plans visible in your budget. If you need a longer term or a larger amount, consider regulated finance options through a reputable UK broker that compares multiple lenders for you.

Important information

This article is for information only and is not financial advice. BNPL availability, fees, and eligibility vary by provider. Always check terms and assess affordability before committing. If you are struggling with debt, seek free advice in the UK.