Across the UK people are struggling financially, no matter their demographic or industry. According to Morgan Stanley At Work, 91% of employees report having faced personal financial issues in the last year. And a Resolution Foundation study found that 42% of adults reported using at least one form of borrowing to cover everyday living costs, with lower incomes more likely to use high-cost consumer credit.
Personal finance issues can have a profound impact on our health and happiness at home and work; by providing support to employees who might be struggling with their finances, employers can mitigate the fallout from it – such as reduced productivity, disengagement and absenteeism.
In partnership with Salary Finance, Reward Gateway clients can offer their employees affordable loans that help them avoid high-interest debts.
Since 2015, Salary Finance has helped employers to embed financial wellbeing strategies and provide salary-linked employee benefits.
Worry-free, financially inclusive loans
With its affordable loans product, called 'Borrow', Salary Finance is able to accept more loan applications and give lower interest rates than traditional banks (they guarantee to have the best rates for loans under £5,000), because the money will be repaid directly from salary. And, by repaying regularly, on time and never missing a payment, it helps users improve their credit score.
Importantly, Salary Finance's 'Borrow' loans are also financially inclusive. 2 out of 3 UK employees are refused loans from banks, giving them no choice but to turn to high-interest options such as credit cards and payday loans (Source: Salary Finance). Salary Finance bases its lending decisions on affordability and personal circumstances, rather than just a credit score, ensuring help is given to those who need it most. Plus, employees can apply without impacting their credit score.
What about employees who are ineligible for a loan?
For those who are ineligible, Salary Finance will either be able to lend them a small amount, or signpost them to further support if borrowing will not improve their situation.
What happens if the employee leaves the business?
Employees are transferred to direct debit repayments should they leave their employer.
There are no platform fees for employers (Reward Gateway or Salary Finance), meaning clients never have to pay for employees who never use the product.
To find out more about the Affordable Loan benefit and discuss how to implement it on your platform, please speak to your Client Success Manager or Client Relationship Manager.