Low-wage workers in the UK can now access high-interest loans of up to £25,000 through the app Wagestream, which links with various well-known employers, including Asda and Pizza Express. This service is part of Wagestream’s offerings, aimed at improving financial wellbeing as an employee benefit. The loans come with a representative APR ranging from 13.9% to 19.9%, with potential caps negotiated with employers at up to 34.9% APR.
The loans are available to employees already utilizing Wagestream’s salary advance service, which allows workers to access a portion of their wages early for a small fee. Wagestream serves over 1,300 clients, including businesses in various sectors, but the specific number of companies offering loans remains unclear. While Wagestream’s model aims to provide an ethical alternative to higher-cost lending options, critics argue that it may encourage financial dependency among low-wage workers.
Concerns have been raised about the company’s practice of automatically deducting loan payments from salaries, which could interfere with other essential bill payments. Workers have the option to make repayments via direct debit, but this requires negotiation with Wagestream. Experts have noted the implications of such lending practices on the financial health of low earners, questioning whether they are truly supporting sustainable income.
Feedback from workers indicates that loans can be easily accessed; one individual mentioned receiving £1,000 shortly after applying online. However, critics see the model as reminiscent of payday lending, which can perpetuate cycles of debt.
Asda and Pizza Express have confirmed their partnerships with Wagestream, emphasizing that the use of the loan service is voluntary and that applications undergo affordability checks according to regulatory standards. Supporters of Wagestream, including the Joseph Rowntree Foundation, acknowledge the concerns but also point to the lack of savings among many households as a factor driving individuals toward high-cost lending options.
Source: https://www.theguardian.com/money/2025/aug/30/financial-wellbeing-app-targets-low-wage-workers-with-high-interest-loans