Britons are bracing themselves for a potentially debt-ridden Christmas season as the popularity of Buy Now Pay Later (BNPL) services continues to surge, especially among younger consumers. SurveyMonkey research conducted for Momentive has revealed that 77% of lower-income consumers in the UK, earning less than £22,000 per year, are apprehensive about being able to afford the gifts they desire for the festive season. As the cost of living crisis is expected to worsen by December, 14% of lower-income consumers and 10% of those earning between £22,000 and £50,000 are making plans to accumulate debt in order to cover their Christmas shopping expenses.

For parents with children under the age of 18, the situation is particularly dire, with 20% of them expecting to go into debt during this holiday season, compared to just 8% of those without children. The most popular gift categories among parents include clothing, toys & games, technology, and beauty products.

Overall, UK retailers are predicted to face a significant decline in sales, as 63% of consumers plan to spend less money during the holidays compared to the previous year. This decrease in consumer spending can be attributed to the rising costs of energy, food, and housing.

Despite concerns regarding supply chain disruptions, the report indicates that 27% of UK consumers plan to initiate their holiday shopping earlier this year. On the other hand, 18% intend to delay their purchases due to inflation. The rising popularity of BNPL services is also evident, with 14% of UK consumers relying on this payment method to cover their expenses related to gifts and food. Among Millennials and Gen Z, 11% plan to complete all of their Christmas shopping using BNPL services, while only 1% of Boomers have the same intention.

Jon Cohen, the Chief Research Officer at Momentive, has expressed deep concern over the financial condition of UK consumers. He emphasizes that the combination of the growing popularity of BNPL services and the anticipation of increased debt during Christmas paints a grim picture. As the holiday season approaches, retailers are already facing challenges in maintaining their supply chains due to the rush of consumers trying to stock up before prices inevitably soar.

(Useful links:
1. https://www.moneysavingexpert.com/credit-cards/buy-now-pay-later/
2. https://www.thesun.co.uk/money/16247306/buy-now-pay-later-services-uk/)