A new employee benefit - enabling employees in the UK to take control of their finances, especially those who are experiencing difficulties managing their debt – is now available to one million people across the country.
SalaryFinance offers UK businesses an employee benefit allowing staff to consolidate their existing personal debts and repay them via a low interest, fixed-rate loan. The repayments are deducted from payroll, rather than direct debit, reducing the interest rate to around one third of the market average (7.9% APR).
The scheme, the first of its kind, was successfully piloted last year and is now being rolled out across the UK.
As a result, SalaryFinance is today announcing a strategic partnership with leading employee benefits provider Benefex, whose platform is available to over one million employees at many large companies across the UK.
A recent YouGov study, commissioned by SalaryFinance, found that a third (32%) of the UK population is carrying significant personal debt, with many paying very high interest rates. And the consequences of stress-related debt are well documented; absenteeism, relationship breakdown, and a loss of productivity at work just some of the consequences of this.
Gethin Nadin, Director of Ecosystems at Benefex says: “One of the fasting growing areas in HR and Reward is employee financial wellbeing. Our clients are looking for innovative new products which can support their employee wellbeing strategy, so we have developed a unique ecosystem that brings together leading financial wellbeing technologies in one place. Positioned at the heart of this ecosystem is SalaryFinance. SalaryFinance provides an innovative solution to improve an employee’s financial health and we are delighted to have them as part of the RewardHub.”
Because repayments are collected directly from salary, the risk of missed repayments is substantially reduced, meaning employees typically with middle to low incomes and credit scores can dramatically lower their interest rate on existing personal debt. The service is completely cost- and liability-free to UK businesses, allowing staff to reduce personal debts more quickly; increasing their disposable income and making their pay go further.
Simon Mounsey, Director of Human Resources at Agilisys, who piloted SalaryFinance in 2015, said staff were “really impressed” with the proposition.
“Take-up has been very positive and on average our employee owners ended up saving over £500 in interest costs, with some up to £1,400. Personal debt can be stressful for staff and we are glad to be have been able to reduce that stress at no cost to the company, by working with SalaryFinance,” he said.
Asesh Sarkar - who co-founded SalaryFinance along with Google UK’s former MD Dan Cobley and entrepreneur
Daniel Shakhani - said that the foundations behind the company were “FinTech with a social purpose” and that the goal of the company was to help ordinary people improve their financial health.
“One in three employees say that money worries impact their productivity at work. SalaryFinance provides a cost-free way for employers to help their staff, particularly those on middle to low incomes, payoff their debt quicker and improve their financial health,” he said.
“We deliver the equivalent of a 3% pay-rise to staff, for free. Our pilots have been a huge success and we are excited about rolling out to the employers across the county. The strategic partnership with Benefex significantly accelerates our reach into some of the largest employers in the country and we delighted to be working together.”