I’m on Universal Credit and using Klarna to pay for Christmas but I’m terrified

MUM Eloise King is worried she might have to cancel Christmas this year as she doesn’t have a penny left after bills.

The 22-year-old single parent to Jude, 3, and Olivia, 2, lives in two-bedroom council house paying £550 rent in Whitstable, Kent.

“I’m battling just to cover my little family's monthly costs,” she said. 

“I might have to cancel Christmas for me as I don’t have a penny left after bills. I have tried everything to stretch my budget.” 

“It is crippling.

“Price hikes and shrinkflation have impacted everyone I know. 

“At the end of each month I have no money for emergencies. I live from week to week.

“The festive season should be joyous. Instead, it is now daunting and financially terrifying.”

The former cleaner has even considered using Klarna to pay for gifts. 

“Other mums like me are desperate to make Christmas perfect for our children.

“The only way I can even consider Christmas is using Klarna and another buy now pay later scheme.

“I am already using BNPL for groceries.

“Now it is the only way I can pay for my children’s presents, make Christmas fun for them, and make ends meet.”

Eliose gets £1,650 a month in Universal Credit - but once she’s paid £550 in rent and the rest of her bills are covered she doesn’t have any money left. 

She’s already struggling to keep up with buy now pay later payments. 

She adds: “Everything I have is spent on my children. I don't buy new clothes and go without each month. 

“I know I am not alone. I am not complaining.

“I didn’t plan to be in this situation but since the cost-of-living hikes and shrinkflation hit this is simply reality.”

 “Every penny I have is accounted for. There is no wiggle room.”

“That's why Christmas is terrifying. I don't want to let my children down. It’s heartbreaking at times. 

Ellie was just 19 when her son Jude was born in January 2021.

“I was working as a cleaner and studying business at college."

“I had planned to open my own bespoke cleaning service using organic products and doing specialist deep cleans.

After Jude was born, she had no other option but to claim Universal Credit until he was old enough to attend nursery.

“I was planning on turning to work part-time but his special education needs meant he required my one-on-one care.

Eloise briefly reunited with her son’s dad and her daughter was born.

“Leah is much wanted and loved. 

“I love being a mum but with two children under three finding work around their needs and schedule has been almost impossible.

“I didn’t plan to be on UC this long. It’s not deliberate.

“I am working on a business plan and attending online business development courses. I am determined to get back to work and be a role model for my kids,” she says.

Eloise admits that after her son was born, she started using BNPL schemes to make ends meet and pay for essentials.

“I started using BNPL In December 2021 because it was the only way I could afford to fund Christmas as well as pay for essential baby kit like strollers, and new winter coats.

“Since then, it’s become a monthly necessity to pay for groceries and stretch the budget.

“It’s why late at night I do my sums and wonder just how I can stretch the budget for Christmas. 

“The thought of cancelling Christmas is awful. 

“So many parents are like me and have that feeling and it is ok to admit it.

CRISIS AT CHRISTMAS

According to a Family Action study millions of families are in financial heartache this Festive season.

It found one in six parents or (16%) are unable to afford Christmas presents for their children. 

Almost seven out of ten parents or 68% will be giving their children more practical presents this year: like old books, clothes, or bedding, rather than the ‘fun’ gifts.

Nearly half of all parents or 46% are going without things in the run up to Christmas to enable them to afford to buy presents this year.

While half or 48% of parents feel they have failed their children because they cannot afford the gifts their children want.

“The cost of the Christmas crisis is impacting so many people. I am not alone,” says Eloise.

“This year I am more reliant than ever before on using BNPL during the festive season.,” she says.

The mum of two says using Klarna or other BNPL schemes for essentials like groceries is her ‘new normal'.”

“Some weeks I use the online app to buy groceries and add in nappies, toilet paper, sausages, socks, and basic clothes for them so I can use BNPL online.

“It’s not because I am spending big it’s because I must. It’s an eat now pay later existence.

Eloise says she carefully budgeted each month to make her BNPL payments allowing her to use BNPL for new purchases because there simply isn’t enough money in her budget.

“Every penny I have is budgeted.

“As soon as I get my Universal Credit, I make my monthly payments. Then the cycle starts again. I have not missed a payment, and I am not incurring interest,” she says.

“I am terrified of overspending on BNPL. Not because I’m spoiling my kids or going overboard but because costs are rising so quickly. This is the only way I can heat the house and keep food on the table,” she says.

“I live in fear of missing a payment. I don’t want a black mark against my name. I don’t want a county court judgement. 

Studies show Eloise is not the only person relying on buy now pay later schemes. 

Citizens Advice research shows that around one in three UK adults or around 20 million people have used Buy Now Pay Later (BNPL)

The study shows those unable to cover the costs of their essentials - like groceries and bills - are more likely to have been a regular user of BNPL.

This year almost half the population or 43% of people will be borrowing money to help cover Christmas.

Elle uses Klarna, Clearpay, Very and PayPal's pay in three schemes on a regular basis.

“Of course I am terrified to be using BNPL for baby wipes, loo roll, bread and milk but I have no other option,” she says.

“I am upcycling items as small gifts for my extended family. I get free items on Facebook Marketplace when I can, and I only spend on the essentials.

“After December 25, the real cost of the Christmas crisis will hit. I am on a fixed income and will need to sell clothes and other items. I will need longer need to pay bills and pay off Christmas.

“I have cut my Christmas spending to the minimum this year. 

“I feel a real stress this year. I do feel hit with mum guilt and BNPL shame," she explains.

“I do know millions of other families are doing the same as us. 

“I do want to warn people that BNPL schemes and credit cards may prevent cancelled Christmas, but they are not the easy solution you think it is.

“These smaller payments add up. A happy pay later Christmas can easily become a post-Christmas crisis.

“Festive debt is for Christmas, not life. That’s why I am urging not splurging.”

Do you have a money problem that needs sorting? Get in touch by emailing money-sm@news.co.uk.