As the cost-of-living crisis in the UK deepens, supermarket shoppers can now split the cost of their groceries and other essentials by using buy now, pay later apps. EPA
As the cost-of-living crisis in the UK deepens, supermarket shoppers can now split the cost of their groceries and other essentials by using buy now, pay later apps. EPA
As the cost-of-living crisis in the UK deepens, supermarket shoppers can now split the cost of their groceries and other essentials by using buy now, pay later apps. EPA
As the cost-of-living crisis in the UK deepens, supermarket shoppers can now split the cost of their groceries and other essentials by using buy now, pay later apps. EPA

Why British consumers are relying on fast credit to stretch their budgets


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The corporate TikTok account for Zilch features brunch plates, tourist trips and snacks for the office dog: buy now, pay later (BNPL) as a lifestyle.

The London-based credit provider, launched about two years ago and now worth $2 billion, says it serves a purpose for both treats and essentials, giving shoppers options to spread the cost of purchases and earn cashback rewards.

TikTok videos from Zilch’s users have different vibes.

“If you’re struggling before payday and need a money hack?? Download Zilch! Game changer,” one caption reads over a video showing milk, coffee, noodles and biscuits. The user added that he makes repayments every two weeks.

With inflation in the UK now forecast to reach 13 per cent later this year as the country falls into recession, Zilch and its BNPL peers are about to discover how their customers choose to use short-term credit in a downturn.

Michael Quinn, 36, who is unemployed and lives in Glasgow, uses Zilch to split the cost of his groceries and energy bills over six weeks, paying it off with his government benefits.

He started using the service last summer after maxing out his credit cards, which he relied on throughout the Covid-19 lockdowns that began in early 2020.

“With benefits, sometimes it’s hard to have money left over to pay for certain things,” Mr Quinn says.

He admits he got carried away with Zilch at the beginning, racking up hundreds of pounds in debt, and says there needs to be regulation.

Still, he believes it’s better than credit cards, which he’s sworn off for good, once he’s cleared about £2,000 ($2,309) in remaining debt.

Larris Grant, 29, uses Zilch for everything she buys, from groceries and clothes to Amazon deliveries.

“I don’t use it as a lifeline; however, if I did need to, I know I can,” the hotel duty manager says.

Ms Grant signed up in 2021 after receiving a £20 cash-reward link from a friend and now collects cashback on purchases — which isn’t the case with her credit card. This perk helped to pay for her children’s school uniform, she says.

While she doesn’t use it to pay for electricity, Ms Grant says it could prove “handy” as her monthly bill has gone up from £90 to £230.

The UK’s price cap on annual energy bills is expected to jump to nearly £3,600 per household later this week, about triple last year’s level, and comes into effect for the final three months of the year. It’s set to keep rising even further in 2023.

Zilch is only one provider in a booming market for short-term credit.

Sweden's Klarna Bank, San Francisco-based Affirm Holdings and Australia's Afterpay have all picked up millions of new customers around the world in the past few years, though investors have begun to raise concerns about how long some of them can keep growing while also losing money.

Big banks such as NatWest Group are also launching similar products.

One in 12 people turned to BNPL to cover basic costs such as food and toiletries in the six months to March 2022, according to Citizens Advice.

The consumer charity likened this credit to “quicksand” and found young people, those in debt and those out of work or claiming low-income benefits were twice as likely to have used BNPL for essentials than the general population.

To be sure, short-term loans have served a purpose in Britain for more than a century and have a lifespan far beyond online start-ups. In August, Iceland Foods, a UK supermarket chain, launched a BNPL option for struggling shoppers, particularly those finding it hard to make ends meet during the school holidays.

Open the Zilch app and after the cool green welcome screen and spending tracker is a list of thousands of retailers.

Scroll down and supermarkets including Asda and Sainsbury’s appear, as do Deliveroo and Uber Eats, along with travel, beauty and home improvement sites.

Customers are given two options: pay off their purchases over six weeks, with no interest or late fees, or pay immediately and accumulate 2 per cent cashback.

Like some of its rivals, Zilch has affiliate agreements with shops, which pay the company a small fee for customers sent their way.

The app can also be used at other websites that accept MasterCard, with the customer paying a small charge instead — though there’s a list of banned items that includes alcohol, gift vouchers and cryptocurrency. Since its launch in 2020, the FinTech has attracted 2.5 million users.

In June, when other FinTechs such as Klarna were watching their valuations crater, Zilch extended its funding round to maintain its value at $2bn. Its most recent fund-raising announcement highlighted “mature customer cohorts now using Zilch daily”.

To celebrate its billion-dollar status, Zilch displays a neon green unicorn at the entrance to its London headquarters.

Chief executive Philip Belamant co-founded the business as an alternative to high-interest loans, believing that customers have been poorly served by an industry that’s barely changed in 80 years.

Zilch’s products “give a customer the most affordable way to pay on credit or debit with the most value back to them”, he says.

Mr Belamant, 37, is proud of Zilch’s status as a regulated company, with a consumer credit licence granted by the UK’s Financial Conduct Authority in 2020. This is unusual in the BNPL industry, which has grown so quickly in part because it’s exempt from regulations on products that charge interest. Mr Belamant says that isn’t “healthy” for the sector.

He’s also aware of the issues that short-term credit can create, noting that Zilch doesn’t allow users to pay off their accounts with a credit card, cycling from debt to debt.

We know that the cost of living crisis is affecting everybody, especially people with lower incomes or poor credit histories
Toby King,
Advertising Standards Authority representative

The company works with credit-checking company Experian to ensure customers can afford to borrow. But Mr Belamant is otherwise open to customers using debt to pay for groceries.

“It’s OK for people to buy fast fashion that ends up in a landfill in six weeks’ time. But for food that people need or something that’s essential for their family? No, they should use high cost credit to pay for this,” he says. “We just do not understand how you reconcile that logic.”

Still, there’s been a shift in the way Zilch markets itself. Earlier advertisements had slogans such as, “Have it Now, Pay Later” below hamburgers and pizza. Now, social media posts say: “Please spend responsibly.”

Last week, the Financial Conduct Authority said it was “proactively monitoring” the sector and would use criminal and regulatory enforcement powers if it saw promotions — including posts by social media influencers — that did not include prominent warnings of the risks involved.

Toby King, representative for the Advertising Standards Authority, says BNPL ads must not specifically target vulnerable groups or exaggerate the speed and ease of using a service and clearly spell out all relevant terms and conditions.

The regulator ruled against Klarna in 2020 for sponsored Instagram posts that claimed spending would lift customers’ moods.

Cost of living crisis in the UK — in pictures

“We know that the cost of living crisis is affecting everybody, especially people with lower incomes or poor credit histories,” Mr King says. "That’s why it’s so important that marketers for delayed payment services [BNPLs] advertise soberly, responsibly and accurately."

Consumer charities are already warning of some BNPL customers getting into difficulty.

“We’ve seen a shopper threatened with debt collectors after splitting the payment of a T-shirt and, more recently, a worrying two-in-five BNPL customers borrowing money to make repayments,” says Clare Moriarty, chief executive of Citizens Advice.

People are using credit cards, overdrafts and borrowing from family and friends to pay off their BNPL instalments, according to the consumer charity.

Frontline advisers have seen customers who were unaware they were taking on credit when presented with a “spread the cost” button at the online checkout. Citizens Advice research showed BNPL shoppers were charged £39 million in late fees in the year through to June 2021, with one-in-three users missing or making a late payment.

Almost two thirds of British BNPL users are under the age of 40, according to the Money and Pensions Service, a financial well-being body sponsored by the UK government.

A key concern for chief executive Caroline Siarkiewicz is consumers prioritising BNPL repayments before other obligations such as rent and council tax bills, which was “really damaging for people”.

The lack of regulation in the sector is keenly felt by 25-year-old nursery nurse Chloe Porter, who has been paying off her loans for seven years.

She used Klarna when she was 17, mainly for purchases of £20 or £40.

“It all adds up to this very long-term issue, which can spiral really quickly when you then start receiving angry letters and phone calls,” she says.

By the time she turned 22, she owed £5,000 to Klarna, online retailers Littlewoods and Very, as well as her credit card bill with Capital One — which she had been using to pay off her BNPL loans.

“Not knowing much about credit, I just buried my head in the sand, which is the absolute worst thing to do,” Ms Porter says.

It’s now also a growing issue among the “squeezed middle” age groups, according to Sarah Coles, senior personal finance analyst at investment firm Hargreaves Lansdown. “People think it’s just spreading the cost,” she says. “So they don’t realise that they’re just entering into a borrowing agreement.”

In some cases, the credit products are marketed to people who are less financially resilient, says Richard Lane, director of external affairs at debt charity StepChange.

“They may have started with a buy now, pay later credit; when they realise that they’re struggling to pay, they might have made a payment with a credit card. They’ll then ultimately try to spin the plates and balance for as long as possible.”

It chimes with the experience of David, 36, an aviation worker, who at one point owed £26,000 in payday loans and believes he is now being specifically targeted by BNPL payment options.

He has received text and emails from providers — despite never using them — and fears his details have been flagged as someone susceptible to loans. He did not want to give his surname when discussing these issues.

“I personally view buy now, pay later as a rebadged payday loan,” he says. “It’s a very slippery slope and I found out the hard way.”

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The White Lotus: Season three

Creator: Mike White

Starring: Walton Goggins, Jason Isaacs, Natasha Rothwell

Rating: 4.5/5

What can victims do?

Always use only regulated platforms

Stop all transactions and communication on suspicion

Save all evidence (screenshots, chat logs, transaction IDs)

Report to local authorities

Warn others to prevent further harm

Courtesy: Crystal Intelligence

if you go

The flights
Emirates flies to Delhi with fares starting from around Dh760 return, while Etihad fares cost about Dh783 return. From Delhi, there are connecting flights to Lucknow. 
Where to stay
It is advisable to stay in Lucknow and make a day trip to Kannauj. A stay at the Lebua Lucknow hotel, a traditional Lucknowi mansion, is recommended. Prices start from Dh300 per night (excluding taxes). 

How much do leading UAE’s UK curriculum schools charge for Year 6?
  1. Nord Anglia International School (Dubai) – Dh85,032
  2. Kings School Al Barsha (Dubai) – Dh71,905
  3. Brighton College Abu Dhabi - Dh68,560
  4. Jumeirah English Speaking School (Dubai) – Dh59,728
  5. Gems Wellington International School – Dubai Branch – Dh58,488
  6. The British School Al Khubairat (Abu Dhabi) - Dh54,170
  7. Dubai English Speaking School – Dh51,269

*Annual tuition fees covering the 2024/2025 academic year

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The%20specs
%3Cp%3E%3Cstrong%3EEngine%3A%3C%2Fstrong%3E%201.5-litre%204-cylinder%3Cbr%3E%3Cstrong%3ETransmission%3A%20%3C%2Fstrong%3ECVT%3Cbr%3E%3Cstrong%3EPower%3A%20%3C%2Fstrong%3E119bhp%3Cbr%3E%3Cstrong%3ETorque%3A%20%3C%2Fstrong%3E145Nm%3Cbr%3E%3Cstrong%3EPrice%3A%20%3C%2Fstrong%3EDh%2C89%2C900%20(%2424%2C230)%3Cbr%3E%3Cstrong%3EOn%20sale%3A%20%3C%2Fstrong%3Enow%3C%2Fp%3E%0A
Getting there

The flights

Emirates and Etihad fly to Johannesburg or Cape Town daily. Flights cost from about Dh3,325, with a flying time of 8hours and 15 minutes. From there, fly South African Airlines or Air Namibia to Namibia’s Windhoek Hosea Kutako International Airport, for about Dh850. Flying time is 2 hours.

The stay

Wilderness Little Kulala offers stays from £460 (Dh2,135) per person, per night. It is one of seven Wilderness Safari lodges in Namibia; www.wilderness-safaris.com.

Skeleton Coast Safaris’ four-day adventure involves joining a very small group in a private plane, flying to some of the remotest areas in the world, with each night spent at a different camp. It costs from US$8,335.30 (Dh30,611); www.skeletoncoastsafaris.com

Key changes

Commission caps

For life insurance products with a savings component, Peter Hodgins of Clyde & Co said different caps apply to the saving and protection elements:

• For the saving component, a cap of 4.5 per cent of the annualised premium per year (which may not exceed 90 per cent of the annualised premium over the policy term). 

• On the protection component, there is a cap  of 10 per cent of the annualised premium per year (which may not exceed 160 per cent of the annualised premium over the policy term).

• Indemnity commission, the amount of commission that can be advanced to a product salesperson, can be 50 per cent of the annualised premium for the first year or 50 per cent of the total commissions on the policy calculated. 

• The remaining commission after deduction of the indemnity commission is paid equally over the premium payment term.

• For pure protection products, which only offer a life insurance component, the maximum commission will be 10 per cent of the annualised premium multiplied by the length of the policy in years.

Disclosure

Customers must now be provided with a full illustration of the product they are buying to ensure they understand the potential returns on savings products as well as the effects of any charges. There is also a “free-look” period of 30 days, where insurers must provide a full refund if the buyer wishes to cancel the policy.

“The illustration should provide for at least two scenarios to illustrate the performance of the product,” said Mr Hodgins. “All illustrations are required to be signed by the customer.”

Another illustration must outline surrender charges to ensure they understand the costs of exiting a fixed-term product early.

Illustrations must also be kept updatedand insurers must provide information on the top five investment funds available annually, including at least five years' performance data.

“This may be segregated based on the risk appetite of the customer (in which case, the top five funds for each segment must be provided),” said Mr Hodgins.

Product providers must also disclose the ratio of protection benefit to savings benefits. If a protection benefit ratio is less than 10 per cent "the product must carry a warning stating that it has limited or no protection benefit" Mr Hodgins added.

LA LIGA FIXTURES

Saturday (All UAE kick-off times)

Valencia v Atletico Madrid (midnight)

Mallorca v Alaves (4pm)

Barcelona v Getafe (7pm)

Villarreal v Levante (9.30pm)

Sunday

Granada v Real Volladolid (midnight)

Sevilla v Espanyol (3pm)

Leganes v Real Betis (5pm)

Eibar v Real Sociedad (7pm)

Athletic Bilbao v Osasuna (9.30pm)

Monday

Real Madrid v Celta Vigo (midnight)

Sinopharm vaccine explained

The Sinopharm vaccine was created using techniques that have been around for decades. 

“This is an inactivated vaccine. Simply what it means is that the virus is taken, cultured and inactivated," said Dr Nawal Al Kaabi, chair of the UAE's National Covid-19 Clinical Management Committee.

"What is left is a skeleton of the virus so it looks like a virus, but it is not live."

This is then injected into the body.

"The body will recognise it and form antibodies but because it is inactive, we will need more than one dose. The body will not develop immunity with one dose," she said.

"You have to be exposed more than one time to what we call the antigen."

The vaccine should offer protection for at least months, but no one knows how long beyond that.

Dr Al Kaabi said early vaccine volunteers in China were given shots last spring and still have antibodies today.

“Since it is inactivated, it will not last forever," she said.

MATCH INFO

Newcastle United 2 (Willems 25', Shelvey 88')

Manchester City 2 (Sterling 22', De Bruyne 82')

UAE currency: the story behind the money in your pockets
Specs

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Range: 400km

Power: 134bhp

Torque: 175Nm

Price: From Dh98,800

Available: Now

UAE currency: the story behind the money in your pockets
SHOW COURTS ORDER OF PLAY

Wimbledon order of play on Tuesday, July 11
All times UAE ( 4 GMT)

Centre Court

Adrian Mannarino v Novak Djokovic (2)

Venus Williams (10) v Jelena Ostapenko (13)

Johanna Konta (6) v Simona Halep (2)

Court 1

Garbine Muguruza (14) v

Svetlana Kuznetsova (7)

Magdalena Rybarikova v Coco Vandeweghe (24) 

ELIO

Starring: Yonas Kibreab, Zoe Saldana, Brad Garrett

Directors: Madeline Sharafian, Domee Shi, Adrian Molina

Rating: 4/5

THE BIO

BIO:
Born in RAK on December 9, 1983
Lives in Abu Dhabi with her family
She graduated from Emirates University in 2007 with a BA in architectural engineering
Her motto in life is her grandmother’s saying “That who created you will not have you get lost”
Her ambition is to spread UAE’s culture of love and acceptance through serving coffee, the country’s traditional coffee in particular.

Key facilities
  • Olympic-size swimming pool with a split bulkhead for multi-use configurations, including water polo and 50m/25m training lanes
  • Premier League-standard football pitch
  • 400m Olympic running track
  • NBA-spec basketball court with auditorium
  • 600-seat auditorium
  • Spaces for historical and cultural exploration
  • An elevated football field that doubles as a helipad
  • Specialist robotics and science laboratories
  • AR and VR-enabled learning centres
  • Disruption Lab and Research Centre for developing entrepreneurial skills
SPEC%20SHEET%3A%20APPLE%20M3%20MACBOOK%20AIR%20(13%22)
%3Cp%3E%3Cstrong%3EProcessor%3A%3C%2Fstrong%3E%20Apple%20M3%2C%208-core%20CPU%2C%20up%20to%2010-core%20CPU%2C%2016-core%20Neural%20Engine%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EDisplay%3A%3C%2Fstrong%3E%2013.6-inch%20Liquid%20Retina%2C%202560%20x%201664%2C%20224ppi%2C%20500%20nits%2C%20True%20Tone%2C%20wide%20colour%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EMemory%3A%3C%2Fstrong%3E%208%2F16%2F24GB%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EStorage%3A%3C%2Fstrong%3E%20256%2F512GB%20%2F%201%2F2TB%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EI%2FO%3A%3C%2Fstrong%3E%20Thunderbolt%203%2FUSB-4%20(2)%2C%203.5mm%20audio%2C%20Touch%20ID%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EConnectivity%3A%3C%2Fstrong%3E%20Wi-Fi%206E%2C%20Bluetooth%205.3%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EBattery%3A%3C%2Fstrong%3E%2052.6Wh%20lithium-polymer%2C%20up%20to%2018%20hours%2C%20MagSafe%20charging%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3ECamera%3A%3C%2Fstrong%3E%201080p%20FaceTime%20HD%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EVideo%3A%3C%2Fstrong%3E%20Support%20for%20Apple%20ProRes%2C%20HDR%20with%20Dolby%20Vision%2C%20HDR10%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EAudio%3A%3C%2Fstrong%3E%204-speaker%20system%2C%20wide%20stereo%2C%20support%20for%20Dolby%20Atmos%2C%20Spatial%20Audio%20and%20dynamic%20head%20tracking%20(with%20AirPods)%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EColours%3A%3C%2Fstrong%3E%20Midnight%2C%20silver%2C%20space%20grey%2C%20starlight%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EIn%20the%20box%3A%3C%2Fstrong%3E%20MacBook%20Air%2C%2030W%2F35W%20dual-port%2F70w%20power%20adapter%2C%20USB-C-to-MagSafe%20cable%2C%202%20Apple%20stickers%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EPrice%3A%3C%2Fstrong%3E%20From%20Dh4%2C599%3C%2Fp%3E%0A
The past Palme d'Or winners

2018 Shoplifters, Hirokazu Kore-eda

2017 The Square, Ruben Ostlund

2016 I, Daniel Blake, Ken Loach

2015 DheepanJacques Audiard

2014 Winter Sleep (Kış Uykusu), Nuri Bilge Ceylan

2013 Blue is the Warmest Colour (La Vie d'Adèle: Chapitres 1 et 2), Abdellatif Kechiche, Adele Exarchopoulos and Lea Seydoux

2012 Amour, Michael Haneke

2011 The Tree of LifeTerrence Malick

2010 Uncle Boonmee Who Can Recall His Past Lives (Lung Bunmi Raluek Chat), Apichatpong Weerasethakul

2009 The White Ribbon (Eine deutsche Kindergeschichte), Michael Haneke

2008 The Class (Entre les murs), Laurent Cantet

Volvo ES90 Specs

Engine: Electric single motor (96kW), twin motor (106kW) and twin motor performance (106kW)

Power: 333hp, 449hp, 680hp

Torque: 480Nm, 670Nm, 870Nm

On sale: Later in 2025 or early 2026, depending on region

Price: Exact regional pricing TBA

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THE BIO

Born: Mukalla, Yemen, 1979

Education: UAE University, Al Ain

Family: Married with two daughters: Asayel, 7, and Sara, 6

Favourite piece of music: Horse Dance by Naseer Shamma

Favourite book: Science and geology

Favourite place to travel to: Washington DC

Best advice you’ve ever been given: If you have a dream, you have to believe it, then you will see it.

Updated: September 08, 2022, 5:00 AM`