Martin Lewis warns all Brits using 'Buy Now, Pay Later' ahead of major shakeup

Cash-strapped shoppers are being urged to remain 'wary' of 'Buy Now, Pay Later' (BNPL) products ahead of huge reform. Whether you're ordering a Friday night takeaway, scrolling Zara for a new dress - or purchasing a new dishwasher after yours finally packed up - you will have probably noticed the option to .

Lured in by not having to immediately take the financial hit of their shopping spree, companies have become seemingly ubiquitous over recent years. Sites like Klarna have now hit a staggering 100 million users, appealing to Brits who want to spread out their payments over several months, or even years.

And while the service may be a much-needed lifeline for those struggling with their finances, consumer protection remains questionable. This week (Monday, May 19) the government introduced legislation in Parliament that seeks to regulate BNPL products under law - giving powers to the Financial Conduct Authority (FCA) to enforce the rules.

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However, the exact details of the legislation are yet to be confirmed, and the fresh regulation won't come into effect until 2026. has therefore warned Brits enticed by BNPL products to remain wary of the financial impact it can have.

"This isn't about knocking BNPL, it's about making it safer,". "BNPL can be useful, allowing those who need to spread payments for a budgeted, necessary purchase, such as a plumber, to do it interest-free. Yet it's been sold as a lifestyle choice, not a debt, and pushed for instinct buys or even takeaways. Too many are in trouble with multiple BNPL repayments, leading to debt-chasing and credit file damage."

Buy Now Pay Later - what's changing

While still under discussion, key changes put forward by the government include giving 'clear and accessible information about the risks involved'. This may make shoppers think twice before automatically option for a BNPL provider. Firms could also be obliged to run affordability checks on consumers to make sure they can actually afford repayments.

"This would apply to items costing over £100 but not more than £30,000, as it does for credit cards currently," . "It means the BNPL provider will be jointly liable with the retailer if anything goes wrong."

Lastly, if you complain to a BNPL firm and don't receive a satisfactory response, you may soon be able to escalate your complaint to the Financial Ombudsman Service. This will make it easier for those rightfully entitled to a refund to make sure they get their money back.

"Regulation will mean firms must be overt that it's a debt, have proper affordability rules, and will crucially let people go to the Financial Ombudsman Service if things go wrong," the money-saving guru explained. "Yet it's not coming in until 2026, so people should still maintain a level of wariness until then."

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Citizens Advice hailed the progress in implementing major reform, calling it a 'crucial step' towards protecting shoppers. "For too long, people have been exposed to unaffordable debt from a BNPL sector that has operated in a regulatory grey area," said Tom MacInnes, director of policy at Citizens Advice.

"For some, this has had dire consequences. Many people are struggling to repay credit they can't afford, falling behind on essential bills and often needing emergency support, like food bank vouchers."

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