46% of Britons suffer money-related stress in the week leading up to payday
Credit cards, overdrafts and payday loans common fallbacks
One in five would consider changing employer for flexibility in salary payment
46% of Britons suffer money-related stress in the week leading up to payday, according to survey results released today. Londoners were most affected with 57% reporting they feel undue pressure during this time.
Currently, 78% of employees in the UK are living payday to payday and cannot cover unexpected costs when they arise. In 2018 more than 10 million short-term payday loans were taken. With the ‘wage-on-demand’ marketplace growing at pace and current wage payment structures unreflective of modern life,fastPAYEis speeding-up access to earned money through its flexible wage app.
Unlike other lending models, the fastPAYE proposition isn’t a loan, therefore charges no interest. Earned salary is drawn down for a small transaction fee but, crucially, the service is free to those who earn the minimum wage.
With ‘Blue Monday’, the third Monday of every January - widely regarded to be the most ‘depressing’ day of the year - stress levels are likely to be more keenly felt than usual this year, exacerbated by a 42-day gap between the pre-Christmas and January 2020 pay dates.
As workers find their coffers running low towards the end of the month, reliance on alternative means of finance has been found to become a necessity for many.
Moreover, in an indication of a rapidly evolving work environment, a startling one in five of respondents also admitted they would consider a new job in the same role if it gave them access to their already earned wages before payday.
In terms of how workers are financing their lives ahead of payday, one in five reported that they turn to payday loans at some point in the year, whilst 43% delve into overdrafts to cover costs in the final week before monthly wages drop.
However, the most common use of credit in the week before payday is credit cards, with 55% admitting to swiping the interest-accruing plastic before the end of the month.
The research was undertaken by fastPAYE, a ‘wage-on-demand’ app provider which allows employers to give staff access to their already earned salaries when needed. The research findings expose the stress many Britons feel in the days leading up to payday as well as reliance on debt.
They found that 36% of those surveyed are likely to use any money/credit they acquire in order to tide them over in the week before payday to pay for groceries. Bills (27%), Leisure activities (19%) and house repairs (15%) were also common prompts for additional borrowing.
Lee Bowden, fastPAYE’s Chief Commercial Officer, said: “The findings of our research are deeply concerning in terms of the implications for people’s mental wellbeing in the run up to payday, with almost half reporting stress. However, they also expose a salary payment structure that is no longer fit for purpose.
“As working practices evolve and the way we process and manage money transforms, the way we pay the workforce has barely changed at all. With a fifth of those surveyed claiming they would consider moving to another company in the same role if that company gave them access to already earned wages ahead of payday, it’s a sign of the changing times and worker expectations in the modern workplace. Indeed, the fastPAYE proposition has been shaped around businesses telling us they want new ways of generating strong staff loyalty and morale whilst improving retention. We believe our app can go some way to making this happen.”
To meet these contemporary workplace demands, the expert developers at fastPAYE have created a tool that is fast and easy to adopt and which gives back control to employees so they can manage their personal finances in such a way that reduces their need to acquire unnecessary debt.
Crucially, for the businesses adopting the fastPAYE app, the technology does not require them to move their payment platforms to different solutions or process payments through different financial platforms.
With a series of high-profile investors ploughing capital in the business and a growing team of industry experts building on initial successes, fastPAYE are hoping their app will become a standard means of drawing down salaries in the near future.
Find out how fastPAYE can help you and your staff, book a demo today