The new Buy Now Pay Later rules could reveal the financial pressures employers can’t see

By Ray Law, founder of the financial wellbeing platform moneyappi

Buy Now Pay Later became regulated last week. From 15 July, lenders must carry out proper affordability checks before approving new borrowing, as they would for a credit card or a loan, and some of the millions of people who have come to rely on these products will be declined for the first time.

While that’s being reported as a consumer story. I think it’s a workplace one, and so far employers have had almost nothing to say about it.

The difficulty with money worries at work is that employers see the impact long before the cause. Concentration slips, absence creeps up, someone who used to speak in meetings goes quiet. By the time any of that is visible, the pressure behind it has usually been building for months. And this week, a coping mechanism that has been quietly holding some of it together stopped being available.

Let me say first that the regulation is welcome, if late. The Woolard Review recommended it in 2021, and in the five years it took to arrive, usage roughly doubled. Working people spent that time borrowing with fewer protections than a store card carries.

Where I part company with much of the commentary is on what the checks will do. The assumption is that they’ll steer people towards better borrowing habits. They won’t, because this was never really about habits. Someone using instalment credit to cover the gap between payday and the end of the month isn’t making a choice they can reverse because an app has declined them. The shortfall was there before the refusal and it’s there after it. What the check changes is that the pressure becomes visible, sometimes to the borrower before they’ve fully admitted it to themselves.

The numbers involved are not small. FCA Financial Lives data puts Buy Now Pay Later use at 10.9 million UK adults in the year to May 2024, up from 8.8 million two years earlier. Use is heaviest among 25 to 34 year olds, at 30 per cent, the core of most workforces. More than five million adults had outstanding BNPL debt of £50 or more in May 2024, and over a million owed £500 or more. The regulator’s own research found frequent users were more than four times as likely as non-users to have missed a bill or credit payment in three of the previous six months.

We see the workplace end of this every day. Debt is consistently among the top five things employees ask Buddi, our digital financial wellbeing assistant, and Buy Now Pay Later runs through more and more of those conversations. What stands out isn’t the amounts, which are often small. It’s the juggling, several agreements at once, each manageable on its own, the whole lot tiring to keep track of, and the way it changes how people feel about their money. These aren’t people in crisis. They’re coping, and people who are coping turn up, hit their deadlines and say nothing, which is why employers rarely know they exist.

This is the group most financial wellbeing provision misses. We’ve built support for people in crisis and content for people doing fine, and very little for the large group in between. Too often, financial wellbeing has meant surface-level perks or one-size-fits-all content that doesn’t touch real life. A person £180 short this month doesn’t need another budgeting article. They need something that understands their actual situation and helps them take one practical step, and that’s a solvable problem. The technology exists, it isn’t expensive, and the workplace is the one place with a genuine opportunity to reach people before things get harder.

So my advice to employers is mostly about timing. Remind people now, before refusals start mounting, that support exists and that using it is private. Most employees would sooner resign than tell their manager they’re struggling with money, so help has to be findable without a conversation. And managers don’t need debt training. They need to notice a change, ask privately whether everything’s alright, and know where to point someone. That’s all, and it’s worth more than any awareness campaign.

Within a year I’d expect employers to see this in their own data, in assistance programme calls about money, salary advance requests and hardship enquiries to payroll. Some will be caught out, having filed credit regulation under things that don’t concern them. But I’d put it more positively. The pressure was always there, sitting inside payrolls, managed through small borrowing decisions nobody at work knew about. These rules make it visible, and visible problems are ones employers can actually do something abou

Disclaimer: The views expressed in this opinion piece are those of the author and do not necessarily reflect the views of The Well Crowd. This content is for information and discussion purposes only and should not be taken as medical, health, or professional advice.