Millions of consumers who utilise buy now pay later options for online or in-store purchases are set to receive improved protection under new regulations effective from the summer. BNPL services, frequently featured at digital checkouts, allow shoppers to distribute the cost of items over time, potentially easing payment management for some individuals.
Controversy and Concerns in the BNPL Market
However, these financial products have sparked significant controversy, with mounting concerns that they may lead some users to overextend themselves financially, exacerbating existing debt issues. In response, the City watchdog, the Financial Conduct Authority, has outlined a series of safeguards aimed at preventing borrowers from falling into problematic debt that could spiral uncontrollably.
Key Safeguards and Regulatory Measures
These protective measures include mandating that customers are provided with much clearer and more transparent information regarding their agreements. This encompasses detailed specifics on payment due dates, exact amounts owed, and the consequences of missed payments. Additionally, lenders will be required to conduct thorough affordability assessments to ensure that customers can realistically repay their borrowings before offering BNPL options.
The BNPL market has experienced substantial growth, reaching a valuation exceeding £13 billion in 2024, with Klarna standing out as the most recognised provider. According to a survey conducted by the FCA, approximately 20% of UK consumers, equating to 10.9 million adults, utilised BNPL services in the twelve months leading up to May 2024.
Upcoming Regulatory Framework
Starting from July 15, the sector will come under the direct regulation of the FCA. Lenders will need to obtain authorisation from the authority to legally provide BNPL products, marking a significant shift towards stricter oversight in the industry.
Half Term Savings and Family Offers
In related financial news, the upcoming half term school holidays present added expenses for many families, with the cost of days out and dining placing additional strain on budgets. To alleviate this, various attractions, including museums, offer free entry, and several restaurant chains are running special promotions.
For instance, Bella Italia is providing a Kids Eat Free offer available all day from Monday, February 16 to Friday, February 20. Families can receive a full kids' meal at no cost with the purchase of an adult main course, applicable for children aged two to eleven and including three courses plus a drink. Similarly, the Mexican chain Las Iguanas has introduced a comparable deal, helping families manage holiday spending more effectively.
Record Number of Working Pensioners
Furthermore, new analysis reveals that older individuals continuing to work past state pension age are making a substantial economic contribution. It is estimated that workers aged 65 and over directly contribute more than £60 billion annually to the UK economy, a figure equivalent to four times the projected annual cost of implementing the "triple lock" pension pledge.
According to the Centre for Ageing Better, this demographic now accounts for one in twenty-five of the UK workforce. The employment rate for this group has more than doubled since 2000, currently standing at 13.2%. Over the past year alone, more than 180,000 people over 65 have joined the workforce, bringing the total to a record 1.7 million individuals, highlighting a significant trend in later-life employment.
