Insights from VibePay reveal a significant spike in the use of instalment payment services, such as Klarna, among individuals earning less than £2,000 per month during the festive period. From November to January, lower earners were found to be 10 times more likely to use Buy Now, Pay Later (BNPL) solutions compared to higher earners.
Based on spending habits from 20,000 VibePay users across the UK, the data underscores a growing reliance on deferred payment products to manage the financial strain of the Christmas season. With the increased pressure of gifting and celebrations, many consumers turned to instalment payment services as a way to spread costs, despite the potential long-term financial implications.
Conor Tiernan, Head of Insights at VibePay, commented:
“The Christmas period often brings added financial stress, both in the lead up and for many months after, particularly for those on lower incomes. Our data highlights how instalment products like Klarna are filling a gap for immediate affordability. While these services can offer short-term relief, they also point to the growing need for better financial tools and education to help consumers avoid falling into unsustainable debt cycles.”
The analysis adds to ongoing conversations about the role of BNPL products in enabling festive spending, especially among those already navigating tight budgets. With the cost-of-living crisis continuing into the new year, the findings underline the importance of offering alternative financial solutions that prioritise sustainability and long-term well-being.
