EXCLUSIVE: Nine in 10 (90%) employees reported that their financial situation is either stable or improved after switching to a flexible pay cycle, according to research from Wagestream.
The financial wellbeing provider’s whitepaper ‘Unlocking the pay cycle’ was authored by its head of impact and inclusion Emily Trant, with advisory input from Resolution Foundation, Money and Pensions Service, Nest Insight, RideTandem and the University of California, Berkeley.
The paper examined the impact of a flexible pay cycle across various demographics, behaviours, and financial wellbeing implications, and was carried out among 4,000 UK workers who access a flexible pay cycle through their employer.
More than half said losing access to flexible pay by moving to a new employer would have a negative impact on their financial circumstances, and 78% said paying a fee for a more frequent pay cycle either had no impact or made their financial situation better.
Among those choosing flexible pay, 26% had an overdraft and 30% used a credit card. Two in 10 (22%) chose flexible pay to help with travel to and from work, 76% used it for bills or necessary purchases, while 21% used it instead of a credit card.
Around one in 10 choose it so they can access overtime pay on the same day as a shift and 11% use it to replicate a weekly pay cycle.
Trant said: “Flexible pay is becoming the standard way that shift and frontline workers want and expect to be paid. It’s encouraging to see this trend having a positive impact, but there is still more we can do.
“Most importantly, employers offering flexible pay have a key role to play: by using non-judgemental, choice-focused language, they can help tackle money stigma and make their colleagues feel better about their financial lives.”
Sarah Porretta, external engagement director at the Money and Pensions Service, added: “This welcome report shows just how vital it is for employers to examine whether their product is truly working for the people who rely on it.
“When someone knows their full range of options, they can make informed decisions about their finances in a way that works for them. This can benefit them in so many different ways and with difficult times ahead, it’s never been more important.”