Buy Now, Pay Later (BNPL) has risen to become a mainstream payment solution in the UK, allowing consumers to split purchases into interest-free installments, transforming both consumer spending, and the financial industry. Over 10 million people in the UK are expected to use BNPL services in 2025, amounting to £38.48 billion in annual spending, a 12% increase on previous years.
Growth Factors
The market is forecasted to grow from £29.85 billion in 2024 to £47.27 billion by 2029, fueled by the growth of e-commerce, changing financial habits, and growing demand for alternative credit, especially among the younger generation and those seeking short term finance.
Consumer Use
A growing number of UK consumers now use BNPL for everyday spending, including essentials like groceries, and transport. 26% of which prefer BNPL over credit cards for regular purchases, and one in ten pay for their weekly shopping using BNPL.
Inflation and the rising cost of living have also contributed to BNPL’s growth, and while some rely on it for budgeting and spreading costs, others like its flexibility and minimal credit checks.
Regulatory Developments
The UK government has announced significant new regulations for BNPL, set to begin mid 2026. The Financial Conduct Authority (FCA) will require providers to conduct affordability checks, ensure clear borrower information, and integrate BNPL under existing consumer credit laws.
Market Outlook
The UK BNPL market is expected to grow 9.8% annually, now to 2029, driven primarily by online channels. With continued expansion, consumers and merchants are increasingly integrating BNPL into their regular shopping habits.
BNPL is now a defining feature of UK retail and personal finance, offering opportunities and new challenges ahead.
