Wbg issues urgent call for financial caution and debt advice with warning that ‘Buy Now, Pay Later’ schemes fuel debt crisis
Wbg, one of Scotland’s leading independent specialist full-service accountancy firms, has issued an urgent call for financial caution and debt advice, warning that, as ‘buy now, pay later’ (BNPL) schemes become increasingly popular, there is growing concern over their impact on personal finances, particularly among young consumers.
According to Paul McDougall, insolvency practitioner at Wbg, these seemingly attractive payment options, designed to make purchasing more accessible, are instead leading many individuals into a cycle of debt, even for small purchases like clothing and everyday goods.
Recent reports show a troubling rise in debt levels across the UK, with BNPL schemes contributing significantly to this issue. What may appear to be manageable, interest-free instalments can quickly spiral into financial strain, as many consumers find themselves unable to keep up with repayments.
“With easy access to credit, consumers are increasingly financing purchases of non-essential, low-cost items such as T-shirts, shoes, and gadgets, underestimating the long-term financial burden.,” he said.
“As debt accumulates and interest charges start to apply, consumers may find themselves struggling to manage their finances, falling into a pattern of missed payments and additional charges.”
BNPL schemes may lead to financial hardship, particularly for younger generations who may not fully understand the implications of deferred payments and the risks of debt accumulation.
“Before opting for deferred payments, it is essential to assess your financial situation and avoid borrowing for non-essential purchases,” said McDougall.
“We also encourage individuals who are facing financial challenges due to BNPL schemes or other forms of debt to seek professional debt advice. Early intervention is key to preventing debt from spiralling out of control.”
Debt advice services offer crucial support in managing financial difficulties, helping individuals understand their options, create manageable repayment plans, and regain control of their finances.
Financial literacy plays a vital role in tackling this issue.
“It is crucial to promote responsible spending habits, educate consumers on the risks of debt, and provide guidance on how to manage money wisely,” said McDougall.
“Schools, employers, and financial institutions can contribute to these efforts by offering financial education and resources.”
