Andy, a server at Pizza Express, faced financial difficulties before his payday and utilized a salary advance service through the financial app Wagestream, which partners with various employers to provide access to early wage payments. The app allows employees to withdraw up to half of their wages early for a small fee. However, Andy soon found himself in a cycle of borrowing, which prompted him to seek a workplace loan of £1,000 at a 29.9% APR to manage his finances.
Wagestream expanded its offerings to include loans of up to £25,000 this year, with automatic repayments deducted from employees’ pay before other bills are settled. This has raised concerns among debt campaigners and unions about the potential for users to fall into deeper debt due to the ease of access to these products. Andy expressed his concern that such services, marketed as essential, could lead to long-term financial struggles, coining a term he referred to as “wage slavery.”
Wagestream was established in 2018 by Portman Wills and Peter Briffet, initially with the goal of providing ethical alternatives to exploitative payday lenders. The app has gained attention by offering additional financial services, such as budgeting tools and financial coaching. Despite its claims of improving financial wellbeing, concerns regarding the long-term effects of its loan products on vulnerable workers remain.
The company has reported a significant pre-tax loss and has thus far relied on wage advances and fees for revenue. Wagestream aims to introduce a broader range of financial services while securing investments from various venture capital funds to support its operations. In response to inquiries about potential risks for borrowers, Wagestream asserted that their lending process includes thorough affordability checks, although critics argue that many of these financial products should be classified as loans.
As the financial landscape evolves, experts emphasize the need for caution and responsible lending practices to avoid creating a dependency on high-interest loans among low-wage workers.
Source: https://www.theguardian.com/money/2025/aug/30/the-apps-like-candy-how-wagestream-borrowers-felt-trapped