Payplan blogs – Christmas 2023

 

There are two PAYPLAN blogs this month, reflecting the busy time of year for our finances. You can read both of them below and can also visit the PAYPLAN website

December 2023 PayPlan Blog #1

Understanding the dangers of using ‘Buy Now, Pay Later’ this Christmas

What is Buy Now, Pay Later?

Buy Now, Pay Later (BNPL) is a payment option offered by retailers to allow customers to spread the cost or delay the payment of their purchase.

It has become a very popular payment method for online purchases, but there has been plenty of controversy in the media surrounding these payment schemes.

Klarna, Clearpay, PayPal – Pay in 3, and Laybuy are just a selection of BNPL providers. While they allow you to split the payment, you could face late fees if you miss an instalment.

Are people relying on BNPL?

The Financial Conduct Authority (FCA) announced that just over one in four adults in the UK (27%) used BNPL at least once in the six months before January 2023.

This trend has continued this year as Citizens Advice found that more than one in four UK adults (28% – the equivalent of 15.1 million people) said they were likely to use Buy Now Pay Later to help with festive spending. This rises to over one in two (56%) parents with primary school-aged children.

It’s next month’s problem….

A lot of people don’t realise that BNPL is a form of credit and it’s important to think about whether you can afford any repayments. And, should circumstances change, will you be in a position to cover your monthly repayments?

Speaking to the BBC, 24-year-old Tamzin McGrath, said using BNPL would be the only way she’d be able to get through the festive period.

“I’ve already got money I need to pay back after using it during the Black Friday sales,” Tamzin told the BBC.

“So I think I will need to use them again for Christmas to get presents.

“If you’ve not got the money right now you think it’s okay because Klarna and Clearpay can pay for it for you and that becomes next month’s problem.”

What are the dangers? 

As the popularity of BNPL continues to rise, consumers must understand that this seemingly convenient option is a form of credit.

While BNPL can prevent you from potentially turning to loan sharks and high-interest loans, the stats reveal a concerning trend, with a significant percentage of adults, including parents, relying on BNPL for festive spending this year.

It’s important to recognise that deferring payments and thinking of it as ‘next month’s problem’ can lead to a cycle of debt, especially if your circumstances change.

Spreading the cost may be appealing short-term, but only if you have the means to make the repayments when they’re due.

Falling into the BNPL trap without a realistic repayment plan may result in financial strain and potential long-term consequences.

Our BudgetSmart tool can help you maximise your income, reduce your spending and find savings in every corner of your finances.

December 2023 PayPlan Blog #2

Make writing a Will your New Year’s Resolution!

Head into 2024 with a productive start by writing your Will and ensuring that your assets are protected and will be distributed how you choose.

Do you have particular wishes you would want to be followed and do you know who you would like to leave your estate to when you die?

Without a clear Will in place your wishes may not be followed in the event of your death and those who you would like to inherit your estate may not automatically do so.

So the question is…. why is making a will so important?

Leave your estate to who you choose

If you do not have a Will in place your property will be distributed in line with intestacy laws which may not be what you desire.

If you are not married or in a civil partnership, your partner will not automatically inherit your estate without a Will dictating that they should.

A Will ensures you can protect your partner’s home, their financial affairs and allows you to plan for the tax-efficient distribution of your estate to protect the interests of those you care about

Make situations easier after you pass.

In your Will you can set out your funeral arrangements if you choose, stating who will receive certain belongings and picking your children’s guardians – therefore helping them through a difficult time.

Your Will may not be valid if your circumstances have changed

If your circumstances have changed, your Will may be affected. For example, if you’ve married, remarried, entered a civil partnership, if you’ve divorced, separated or dissolved a civil partnership, or following the birth or adoption of children.

Peace of mind

Setting out your Will provides you with peace of mind knowing that your wishes will be respected, your loved ones protected and a clear plan in place.

This article has been prepared by PayPlan along with our partner Adroit Legal Services and is not intended to constitute legal advice.

What you can do next if you need debt advice

If you are struggling with debts call us on 0800 389 3302. We’re open from 8am – 8pm Monday to Friday and 9am – 3pm on Saturdays.

Alternatively, you can visit our www.payplan.com/unison to speak to us via live chat or for more information.