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More Than A Third Of UK Workers Say They Have Used Buy Now, Pay Later Services During Cost Of Living Crisis

According to a survey of more than 3,000 employees, more than a third of workers have used purchase now pay later loans to help them deal with the cost of living crisis.
To combat rising costs, people also use credit cards, bank loans, and payday loans. However, if repayments are late, missed, or improperly managed, all of these products can carry high interest rates.
Although it is obvious that people are keeping a strict eye on their spending, if nothing changes soon, our data indicates that an increasing number of employees will be resorting to debt, if they haven’t already.

While credit has a place in a sound financial plan, it is never the solution to a personal debt crisis. Not only could this jeopardize an employee’s ability to manage their finances in the future, but it may also cause a national “cost of living comedown,” which would undermine consumer confidence and impede the economy’s recovery.

About half of those seeking assistance from Citizens Advice are already in “negative budgets,” meaning there is nothing that can be done to balance their income and outgoings.

According to a poll conducted by professional services company Barnett Waddingham, 38% of employees had utilized BNPL and another 15% expected to do so in the future.

A little under one-third (30%) reported using their credit cards more frequently, while 17% had gotten a bank loan. Payday loans were being used by 12% of the population in the meantime.

According to professional services firm Barnett Waddingham, this boom in cheap borrowing might have a long-term negative impact on the UK’s economic recovery by delaying a return to confidence as more and more vulnerable customers struggle with accumulating debts at a time of slow wage growth.

Others stated that they were thinking about using their necessary savings to cover additional expenses, while 16% were considering selling their investments and a comparable amount indicated they would depend on their pension to get by.

Twelve percent of respondents stated they had already begun using a food bank.
Partner at Barnett Waddingham Julia Turney said: “We’re now worryingly seeing the expansion of a “financially insecure” workforce as people’s earnings aren’t covering their monthly outgoings.” Wage growth has seen small increases in recent months, she added.
Just 13% of respondents to the study claimed they had sought assistance from a mental health charity, compared to fewer than 10% who had donated money (9 per cent).

The results corroborate data from Monzo, which revealed that 53% of British think their mental health is negatively impacted by not being honest about their finances.

Also, 38% of respondents claimed that the cost of living problem has made them even less forthcoming with financial information.

30 percent of people believe it’s difficult for them to talk about money, while 29 percent feel too ashamed to do so.

Financial issues were the real reason for one in four respondents’ (40%) excuses not to do something, which caused them to feel anxious (28%) and even ashamed (3%). (24 per cent).

‘Our findings demonstrate that money really remains the last taboo in ordinary social interactions, with people even shying away from talking to their nearest and dearest about the topic,’ said Sujata Bhatia, chief operating officer of Monzo.

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