Borrowing, owing and Buy Now Pay Later (KS3)

Key Stage: KS3
Year group: Year 7-9
Age range: 11-14
Duration: 50 minutes
Subject: PSHE / Citizenship / Maths (percentages)
Cost: Free

Learning aim

Pupils can explain what it means to owe money, that borrowing usually costs more than you borrowed (interest and fees), how Buy Now Pay Later works and where its risks are, and when saving up is the better choice than owing.

CURRICULUM Curriculum links (four UK nations)

PSHE Association KS3: about the role money plays; how to manage money, including saving, spending and borrowing; recognising the influence of marketing.
Citizenship KS3 (England): the functions and uses of money; rights and responsibilities of consumers.
Maths KS3 (England): percentages of amounts; interpret simple financial calculations.
Scotland (CfE): Health & Wellbeing — managing money and risk; Numeracy — money and percentages.
Wales: Health & Well-being AoLE — decisions and influences; Mathematics & Numeracy — percentages.
Northern Ireland: Learning for Life and Work — personal finance; Mathematics & Numeracy — money and percentages.

See the full mapping on the teacher curriculum map.

RESOURCES What you'll need

Mini-whiteboards + pens; calculators
Three "price tags" for the same item: pay now £40 · BNPL 4 × £10 · missed-payment route
Worksheet: save-up vs owe grid

CONTEXT Background for the teacher

Owing money means using money you do not have yet and promising to pay it back later. The promise is the important part — the money still has to come from somewhere.
Borrowing usually costs extra. Lenders often charge interest (a percentage on top) or fees. So £100 borrowed can mean paying back more than £100.
Buy Now Pay Later (BNPL) — e.g. paying in instalments at checkout — is often interest-free if you pay on time. The risks are: it makes spending feel smaller than it is; missed or late payments can mean fees; and several BNPL plans at once are easy to lose track of. BNPL is being brought under Financial Conduct Authority (FCA) regulation in the UK; like most credit, the minimum age is 18.
Not all borrowing is bad — mortgages and student loans are taught later at KS4/KS5. At KS3 the focus is the everyday choice: save up for a want, or owe for it.

LESSON Lesson structure (50 minutes)

5 min
HOOK

Show a £40 item with two price tags: "Pay now: £40" and "4 payments of £10". On whiteboards: "Which looks cheaper — and are they actually the same price?" Draw out that £10 × 4 = £40, so they cost the same if every payment is made on time. The hook is that "smaller payments" can feel cheaper without being cheaper.

12 min
TEACH

Build the language: owe, borrow, repay, interest, fee, Buy Now Pay Later. Use the background above. Core message: pay later still means pay; borrowing often costs extra; and BNPL only stays "free" if every payment lands on time.

12 min
GUIDED

Pairs complete the "save-up vs owe" grid for a £60 want at £10/week pocket money: (a) save up — 6 weeks, total cost £60; (b) BNPL paid on time — get it now, total £60; (c) BNPL with one £6 late fee — total £66. Pupils write one sentence on what changed and why.

13 min
CHALLENGE

Percentage task: "You borrow £50 and pay back £55. What percentage extra did borrowing cost?" (10%.) Then: "Why might three BNPL plans of £10 a month each be harder to manage than one £30 cost?" Discuss losing track, payments landing together, and money promised before it is earned.

8 min
PLENARY

Each pupil writes a "two-question test" before using pay-later: e.g. "Can I definitely pay every instalment on time?" and "Would saving up cost me less and stress me less?" Share three. Close on the safeguarding/help message.

DIFFERENTIATION Adapting for all learners

Support

Pre-fill the grid's "save up" column. Give the percentage task as £50 → £55 with the difference (£5) already shown. Sentence starters: "Pay later still means…", "Saving up costs…".

Stretch

Compare a 0% BNPL paid on time with a missed-payment route and an example interest rate; explain why "0%" is conditional. Draft an honest one-line warning a checkout could show.

SEND SEND adaptations

Use the three physical price tags so the comparison is concrete.
Pre-teach vocabulary with picture cards: owe, borrow, repay, fee.
Replace the written sentence with choosing the better option from two cards and saying why.
Offer a calm opt-out for any pupil for whom this is sensitive (see safeguarding).

EAL EAL support

Bilingual key words: owe / borrow / pay back / extra cost / on time.
Keep the grid visual and numeric so understanding is not language-dependent.
Allow answers as annotated calculations or diagrams.

ASSESSMENT Assessment criteria

Working towards: can say that owing money means paying it back later.
Expected: can explain that borrowing can cost extra, and that BNPL is only "free" if paid on time; completes the save-up vs owe grid correctly.
Greater depth: can calculate the percentage extra cost of borrowing and explain why several BNPL plans are harder to manage than one upfront cost.

HOME Homework pack

Spot pay-later (no spending). Find one shop or app that offers "pay in instalments". Write two sentences on one benefit and one risk.
Percentage practice. You borrow £80 and repay £88. What percentage did borrowing add? (Answer: 10%.)
Talk task (optional, voluntary). Agree one household "rule of thumb" for saving up vs paying later with a parent or carer. Nothing to hand in.

SAFEGUARDING Classroom safeguarding

This can be sensitive. Some pupils live with family money worries or debt. Keep all activity about how borrowing and BNPL work — never ask pupils to share their own or their family's debts, money problems or spending in front of the class.

If a pupil discloses a worry, follow your school's safeguarding policy and speak to the Designated Safeguarding Lead. Respond calmly and without judgement; do not promise confidentiality.

Help to share and display:

Childline — free and confidential for any child: childline.org.uk or 0800 1111.
For families, free debt help exists from MoneyHelper — mention it generally, do not single out any pupil.
Always okay to talk to a trusted adult at home or school.

This is general financial and PSHE education, not advice. See our editorial & sourcing policy. Free to use in UK classrooms under Creative Commons CC BY 4.0 with attribution to UK Tax Drag.