More than half (58%) of 18- to 24-year-olds have run into issues with paying back buy-now-pay-later schemes, and a similar proportion (57%) feel these schemes encourage overspending.
That’s according to new research by employee payment app Hastee, which also found 49% of those surveyed said buy-now-pay-later encourages them to buy more than what they need to.
Almost half think that these credit schemes encourage them to buy things they don’t really want on later reflection.
Alongside this, 57% said they have used at least one loan, credit or overdraft more than they did before the pandemic. The average across all ages was 39%.
Almost three in five (59%) of those aged between 18 and 24 say they have “regularly” or “more than once” applied for high-cost credit (such as buy-now-pay-later schemes, credit cards, overdrafts or payday loans) knowing they’d struggle with repayments but felt they had no other choice.
The findings come at a time when many retailers are aiming to boost online sale with the easy availability of credit.
The pandemic has clearly made an even greater negative financial impact on an already struggling generation, says Hastee.
42% of young workers said they have been unable to make an essential purchase due to lack of readily available cash.
In some cases, this age group is regularly going without basic food or meals (16%) and heating (8%) to make ends meet.
When asked why they access high-cost credit, over half (53%) of the young and working said it was to pay for everyday expenditure — to bridge to the time when they get paid.
More than half (55%) of 18 to 24-year-olds — the greatest proportion of any age demographic — would like to be paid more frequently in order to have increased control over their finances.
Hastee CEO James Herbert said: “While buy-now-pay-later can be an effective means to grab a great deal, it can also have a really negative effect on a person’s financial health if they were to fall behind with the repayments.
“Our research shows that many of Britain’s youngest workers are already heavily reliant on high cost credit, and we know that many people are under greater financial pressure than ever before.”
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