In the evolving landscape of financial services, Earned Wage Access (EWA) is emerging as a compelling solution to the traditional payday cycle. In the United Kingdom, workers and employers alike are turning their attention to this innovative approach, which allows employees to access a portion of their earned wages before the usual payday. This concept is gaining traction, with 15% of all employers in the UK now offering it, as it promises to enhance workers' financial flexibility and wellbeing.

Understanding Earned Wage Access

Earned Wage Access (EWA), also referred to as On-Demand Pay, is a service that empowers employees to request their earned pay whenever they need it. This eliminates the often rigid and antiquated fortnightly or monthly pay cycles, offering much-needed liquidity during unexpected financial strains.

Unlike payday loans that come with exorbitant interest rates and fees, earned wage access services typically charge a flat, minimal fee to access wages that the employee has already earned. No interest. No debt. By tapping into their own earnings, workers avoid debt traps and improve their financial planning capabilities.

Key Players in the UK Earned Wage Access Scene

Among the plethora of providers cropping up in the UK landscape, two names stand out due to their innovative platforms and user-friendly services: Level and Wagestream. These companies have become synonymous with Earned Wage Access, leading the way in transforming how people think about and access their wages. In fact, they are the only two companies with the technology to automate Earned Wage Access in the UK - all other providers require manual deductions by payroll.

Level

Level has been instrumental in changing the narrative around payday and providing a more flexible pay model. With a user-friendly interface and a straightforward setup process, Level offers a seamless experience for both employees and employers. They've positioned themselves as not just a service but as a tool for fostering financial wellness and empowering the workforce. They proudly have never, and will never, off debt to their users! They believe that On-Demand Pay should be offered as an alternative to payday loans, not next to.

Wagestream

Wagestream is a considerable player in the UK earned wage access market. Wagestream's focus on other financial tools, like insurance and ethical credit, along with its Earned Wage Access services. This mix of services makes it more of a ‘super app’ that cross-sells and offers multiple paid services to your employees.

HR Software Providers

Access Group and Ceridian offers Earned Wage Access to those who already use their other services and are a good choice for existing customers.

Salary Finance

Salary Finance are primarily an employee loan company and are best thought of as such. Their Eared Wage Access solution is limited and complex, and they should be considered for lower cost employee borrowing only (of which they are well renowned for).

Hastee, FlexEarn and Others

Smaller providers like Hastee, Flex Earn and others are best avoided as their technology is unable to automate Earned Wage Access.

Benefits of Earned Wage Access

The ripple effects of adopting an Earned Wage Access system are multifaceted. For employees, the immediate benefit is the ability to manage unexpected expenses without resorting to high-interest credit options. This access can relieve common financial stressors, leading to a more focused and content workforce.

For employers, offering Earned Wage Access services can boost hiring and retention rates. In fact, companies which use Level have seen a decrease in unfilled shifts by 62%, and a reduction in staff turnover by 50%. Companies become more attractive to prospective employees and demonstrate a commitment to their current workforce's well-being. This perk underpins a company culture that values and supports its employees' financial health.

Conclusion

Earned Wage Access is quickly becoming an essential service in the UK, with providers like Level and Wagestream leading the charge. By offering flexibility and support, earned wage access is not just redefining how employees get paid; they're actively contributing to a healthier economic ecosystem.

If you're intrigued by the potential of Earned Wage Access and how it might fit into your financial or business strategy, explore the burgeoning world of companies like Level and Wagestream. They may hold the key to unlocking financial freedom and flexibility for the UK workforce.

Read more about the industry’s Code of Practice on the Chartered Institute of Payroll Professionals’s website: