A study by Money Pensions Service (MaPS) found 19% of 2,507 respondents said they used BNPL agreements to pay for essentials like groceries, toiletries, household bills and fuel.

Buy now pay later is a form of credit allowing customers to spread the cost of purchases over a number of payments without paying interest. However, where customers fail to make a payment or pay late, providers can and do impose penalty charges and interest.

The research also revealed that more than half of BNPL account holders (55%) currently have an outstanding payment and a third (33%) have at least two.

The levels of the debt people have with the schemes was highlighted and of those with outstanding payments, 55% owed more than £100, while one in seven (14%) owed more than £500.

Meanwhile, two thirds (69%) said they have used it despite intending to pay for the item in full originally.

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Workers ‘haven’t recovered from 2008 credit crunch’

Jackie Spencer, head of money and pensions policy at the Money and Pensions Service, said: “Buy Now Pay Later can be a useful way to spread the cost of purchases and it often provides a real lifeline to those needing short term borrowing for essentials. However, like all credit products, it’s an important decision and everyone should take time to decide whether it’s right for their circumstances.

“This research shows that many people are using it when they hadn’t intended to and spending more because it was available. It’s absolutely crucial that they make sure they can afford the repayments and don’t risk turning a short term product into long term debt.”

Alastair Douglas, CEO of comparison site TotallyMoney reacted to the MaPS findings, saying: “We’ve not yet recovered from the 2008 credit crunch, and fifteen years of sustained wage stagnation has left workers £11,000 per year worse off.

“Nearly nine million adults are struggling to cover everyday essentials, and they’re turning to credit to help plug the gap. However, more than 20 million people in the UK are financially under-served — and they have nowhere else to turn other than high-cost, unregulated or illegal lending.

“Buy now pay later falls into this category, and while it can provide users with some breathing space, the lack of regulation creates a grey area, meaning customers might not know what they’re signing up for, or how the product works.”

Not only is BNPL being used for household bills, but an investigation in August by The Observer, revealed patients were being encouraged to sign up to pay later schemes to cover basic healthcare needs and procedures.