One in 10 public sector workers using BNPL firms

According to the University of Edinburgh, one in 10 public sector and NHS staff, who were initially rejected for a more conventional loan on the basis they could not afford to repay it, went on to secure BNPL loans last year. 

The researchers also found the use of BNPL products among public sector employees had “increased significantly” relative to other credit and loans, displacing other non-traditional lenders such as those offering high-interest payday loans. 

Speaking to The Guardian, professor Tina Harrison of the University of Edinburgh’s business school said the rising use of BNPL increased the risk of public sector workers falling behind on their payments. 

She explained: “The increase in the use of BNPL, especially among individuals with very low financial resilience, is extremely worrying. Left unchecked, BNPL has the potential to very quickly lead to an unmanageable debt burden.” 

These findings come off the back of rapid growth for BNPL firms during the pandemic, with research from Barclays Bank and StepChange also finding that almost a third of BNPL borrowers said their loans had become unmanageable and had pushed them into problem debt. 

Shoppers who used such services were paying off an average of 4.8 purchases in June of this year - almost double the 2.6 purchases in February.