Brits back BNPL regulation for flexible payment options  

As cost-of-living pressures continue, an increasing number of Brits are ditching traditional forms of credit and turning to buy now, pay later (BNPL) products as their preferred method of managing expenses. This burgeoning industry gives consumers the option to purchase what they need, receive the goods and then split the purchase into instalments over a set timeframe. 

As BNPL has grown in popularity, a new study shines a spotlight on how UK consumers use the service, their financial literacy regarding traditional credit-based products and their opinions on regulation. 

The study by Clearpay explored how 3,000 UK adults used BNPL. More than half of respondents said they used these services to spread the cost of purchases while almost two in five used them to manage their budget.¹  

Families lean on BNPL for big-ticket buys 

The research suggested families were big proponents of BNPL, regularly taking advantage of their services to support their children’s hobbies and extracurricular activities. One in seven (15 percent) parents plan to use BNPL in the future to buy sports equipment while a further 9 percent plan to do the same with musical instruments. 

The study also found that big-ticket items were high on the agenda for BNPL adopters, with furniture (39 percent), technology (39 percent), white goods (34 percent) and holidays (26 percent) being the top priorities for consumers.  

Regulation underway  

It’s clear that regulation is important to UK consumers with the majority (71 percent) of adults agreeing that BNPL should be subject to financial regulation, and 60 percent of respondents believing BNPL regulation will improve consumer protection. However, more than half (57 percent) are unaware that regulation is underway.  

The future is bright though. With consumer financial protections and access to the Financial Ombudsman Service to be included within the sector-wide regulation, trust in and adoption of BNPL services are sure to increase.  

Prioritizing customers, not debt 

Clearpay was built with transparency and consumer protection in mind, with a mission to give UK consumers more financial flexibility in a landscape once dominated by high-interest credit cards.  

Clearpay prides itself on capped late fees of £24 or 25 percent of the order value (whichever is less) and safeguards to stop long-term debt accumulating. Explaining their customer-oriented approach, Rich Bayer, UK country manager at Clearpay, says: “With 94 percent of our transactions incurring no late fees, we know that our customers use Clearpay to help manage their spending. If a customer does miss a payment though, we freeze their account to ensure they can get back on track and keep on top of their payments.”  

Regulation for BNPL products is now being debated and finessed by policymakers. It is expected to come into force from early 2026, a change that Bayer enthusiastically welcomes: “At Clearpay, we have always called for regulation that prioritizes customer protection, delivers much-needed innovation in consumer credit and sets high industry standards across the sector.” 

More choice, more transparency 

Credit cards have long dominated consumer spending, with 55 percent of respondents having a card in use, despite 13 percent paying interest on the product each month. In fact, one in five are actively trying to reduce their credit card usage. 

The research found there is still confusion about financial products. Two-thirds of people do not understand what a credit card APR is and more than half are unaware that BNPL regulation is underway. However, Brits are clear on their priorities for financial products, with 44 percent wanting a product that charges no interest at all.  

With the average household credit card debt sitting at £2,534* compared with £51 for the average active Clearpay customer, you can understand why Brits are gradually changing the way they pay.   

More options mean more people can access exactly what they need. As money expert Ellie Austin-Williams comments: “A wider range of financial products benefits consumers by giving them the flexibility to choose options that suit their needs. It’s essential for people to understand their payment choices and select a product that aligns with their financial priorities, whether that means opting for an interest-free option or the ability to spread payments. The upcoming regulation of BNPL is a welcome change, offering consumers greater confidence in using the payment method that works best for them.” 

For too long traditional credit systems have relied on consumers remaining and even accumulating debt. With the introduction of BNPL services and Clearpay leading the way after being awarded ‘The UK’s most trusted Buy Now Pay Later’, consumers are being prioritized for the first time.  
 

It’s not just consumers who will benefit either. From a business perspective, Clearpay and other providers help merchant partners reach new customers and retain existing ones.  

With nearly half (49 percent) of respondents believing that BNPL regulation will encourage more UK retail spending and support economic growth, it’s clear that regulation could lead to better outcomes not just for consumers and businesses, but also for the UK’s retail industry as a whole.  

1] Survey conducted by Censuswide for Clearpay, Feb 2025. Sample: 3,000 UK adults.

*Credit & Charge Card balances – Oct 24 | The Money Charity.  
Based on the Fairer Finance 2025 Gold award for Most Trusted in Buy Now Pay later.  
Clearpay figures: Clearpay internal data Feb 2025. Clearpay is unregulated credit. Please use responsibly. T&Cs, late fees of up to £24 per purchase apply clearpay.co.uk/terms.