Flexible pay, also known as earned wage access (EWA), offers people a way to access funds without resorting to costly borrowing. Alongside budgeting and payroll saving tools, it can boost financial wellbeing for employees.
While pay may have seen a broad uplift, increases continue to lag behind inflation. This, combined with high borrowing costs and persistently high energy prices, means the cost-of-living crisis is still a big issue.
Our financial wellbeing report revealed that 73% of British and Irish employees are more worried about their finances now than pre-pandemic. As a result, a huge 83% want their employer to give financial wellbeing as much focus as mental and physical wellbeing.
Taking action using flexible pay (earned wage access)
One way organisations can show they’re listening is to offer flexible pay, or earned wage access (EWA), as part of financial wellbeing packages.
Following the launch of our workplace finance platform, MyView PayNow. This service is now available to some three million employees at UK companies using our MyView self-service HR portal. They can also use it via a standalone mobile app, listed on the Apple App Store and Google Play Store.
A key benefit is that, should an unexpected or emergency expense arise, employees can gain fast access to cash. They can instantly draw up to 50% of their earned pay at any time, including the day before payday. Hourly-paid workers, who tend to have fluctuating earnings, can smooth out inconsistencies and help reduce cashflow problems.
Even better, the service does not constitute credit, a loan, or any other form of borrowing. As a result, credit checks aren’t required and staff pay no interest on the funds they access. This helps them avoid the high interest rates associated with credit card debt or payday loans.
Instead, funds, available for a fixed transaction fee of £1.75, simply amount to a portion of what employees have already earned that month. They can also benefit from financial coaching and advice to help them build positive money habits.
Boosting financial wellbeing and resilience
Another means of helping employees boost their financial resilience is found in MyView PayNow’s ‘Build’ feature. ‘Build’ makes it easy for employees to put money away for either a rainy day or to help them meet a specific target.
All they need to do is to set a ‘Build’ goal and a deadline. The service calculates their monthly contribution and automatically transfers savings to their pot on payday, at zero interest.
Money can also be transferred in or out of the pot for free within two hours. Monthly draws incentivise further saving. This is important when 11.5 million people in the UK have a nest egg of less than £100.
Further support also comes in the form of a pay and spend tracking tool. This enables employees to view all their worked and forthcoming shifts, expected pay, and bank transactions (by connecting accounts using Open Banking) in one place in real time.
Visibility and control make it much easier for people to budget and match their spending with income levels, enhancing their money management and financial wellbeing.