By Now Pay Later debt crisis spirals as needy families turn to it for food and nappies

Real Britain is a Mirror series that stands up for your community and asks how politics affects real people. This week Ros Wynne-Jones and Claire Donnelly reports on families trapped in a cycle of debt using multiple BNPL accounts just to be able to afford to eat

Alannah is counting the “Buy Now Pay Later” debts she has built up since the cost-of-living-crisis began.

“It started with Klarna in 2021,” she says. “It was easy to get credit with them, and a way just to cover all the things we need – food, nappies, the basics really.”

Alannah, 29, lives in Moray, ­Scotland, with her husband and their two young children, Kian, five months, and Odin, three. Both she and Jaimie, 31, are disabled and they’ve struggled to meet the growing cost of living on their fixed benefits income.

“I used to be able to get a big shop, but now that’s gone up so much it feels beyond reach,” Alannah says.

“You can get trapped in a cycle – you run up the BNPL accounts, then you have to pay it off, so you have it there to use again. So, you never really get clear."

“People can have a lot of accounts open – as well as Klarna, I’ve got Clearpay and Zilch because you can use that in Asda. It’s a trap, but it’s the only option. My mental health is terrible. All I want is some security, but I can’t get any other form of lending.”

The free debt advice organisation Money Wellness has seen a threefold increase in the number of people seeking help with BNPL debts over the past 12 months.

The debt counsellor says BNPL credit was once just used for major purchases, but advisers are now seeing a spike in people using it to buy ­essentials like food and baby products.

Kerry was in more than £10,000 worth of debt when she ended up in A&E with stress. Money Wellness has since helped her untangle the debt of 43 separate BNPL accounts, including Klarna.

Since the cost-of-living crisis began, she had been using BNPL to buy food and nappies for her two children, who have special needs, after fleeing domestic abuse. She asked for her name to be changed.

“Kerry feels BNPL lenders have offered her no support,” says Sebrina McCullough from Money Wellness. “She’s only had communication with them for them to offer to increase her limit or offer additional products. She has 43 active BNPL debts to the value of £10,937 and a total debt of £21,531.”

The volume of the Buy Now, Pay Later market has more than ­quadrupled in size since 2020 and is expected to reach a record total of £30billion this year. Money Wellness and other organisations like Citizens Advice have been calling on ministers to urgently regulate the sector to protect “Generation Debt”.

“BNPL is being used more often for smaller amounts among customers contacting us recently,” Sebrina says.

“This suggests people have moved to using it to buy food and essentials and to help with cost-of-living pressure, as opposed to buying big ticket items. While the average customer has 2.3 BNPL accounts, we also have lots with 40, 50, 60 or 80 open BNPL payments.

“One lady is a 56-year-old single mother of three who has 56 open BNPL payments. The total debt of these is only £1,500 – which suggests she’s using BNPL for small payments like food and living costs because she can’t afford essentials.

“Customers tell us they haven’t completed any affordability checks when they are signing up to use BNPL online or in store, which they feel is why they can access so many accounts.”

Alannah explains: “Psychologically it’s easy to think that because the ­individual payments are small, that it’s not too bad, but they add up quickly – and you can be paying a lot each month before you know it.

“It’s not sustainable with BNPL, you worry about using it too much, getting too far in debt with it, but it’s a risk because for a lot of us, it’s the only lending option.”

A spokesperson for Klarna said they have been calling for more regulation of the sector themselves.

They added: “Klarna’s short-term, interest-free credit products are a fairer, more manageable way to access credit. Each time you use Klarna, behind the scenes, we check how affordable the purchase is; we look at both internal data and perform external credit checks with leading credit reference agencies.

“This approach helps ensure that our customers are better able to stay on top of their payments, and use credit more responsibly, than ­traditional credit providers.”

Zilch, another provider, said it was already regulated under a programme with the FCA, and Argos pointed out its card is a regulated product that comes with credit and affordability checks.

Junelle Seymour, 47, lives in ­Buckinghamshire with her husband, Levi, 80, who is on a state pension. She usually works as a carer but has had to take time off work because of her mental health. Junelle turned to BNPL lending after struggling to pay for basics like food on her Universal Credit income.

She owes £750 on one account and £400 on another. She hopes to get back to work soon but is terrified about being able to keep up with her multiple repayments.

“I used BNPL to cover the gaps, to get food, ­essential things, when I didn’t have enough money coming in,” Junelle says.

“I just about had enough to pay my bills when I was working, but it got harder when I was off. My husband just has the pension, and our rent alone is over a £1,000."

“Buy Now Pay Later is easy to get – it feels like no one is checking what you can afford so it’s an easy option when you’re struggling. You can take out a few accounts, no one will stop you. The repayments are small on their own, but they all add up and it can get to be a lot quickly."

“I used an Argos one to get food shopping at Sainsbury’s, then others when I’ve needed them. I feel scared about it now, the repayments, and how I’m going to make them."

“It’s made my mental health worse. It’s this feeling of stress all the time, thinking I can’t meet the needs of my family. I hope that I can get back to work and try and pay it all off but until then I’m stuck.”