For Irish employees paid monthly, November and December can mean too much month and not enough money. November, a 5 week month runs into December, and this already very expensive month can make the 6 week run into January’s pay packet the very worst of times.
New research commissioned by Wagestream, Ireland’s first income streaming app that allows employees to access a percentage of their own, earned wages before payday, reveals how financial strain is impacting workers in Ireland, prompting them to borrow money, enter an overdraft, or access payday loans.
More than three-quarters (78%) of workers claim that they feel financial strain before their pay cheques arrive and almost 2 in 5 workers (39%) report they need to borrow money before the end of the month with some degree of frequency.
Almost 1 in 5 (18%) workers claim that they have used or thought about using a payday loan company to bridge a financial gap with 6% claiming to have actually used a payday loan company in the past.
Almost half (48%) of workers claim that financial strain has resulted in them having to cancel activities with family and/or friends while more than 2 in 5 (44%) workers claim that financial strain has resulted in stress and pressure at home.
In a worrying trend, workers aged 18-24 (26%) are significantly more likely to have used a payday loan company to bridge a financial gap. This figure was more than 20 points higher than all of the other age groups.
Available through the employer, the Wagestream App allows employees to avoid borrowing money or taking out high interest loans by giving them flexible access to their wages as they earn them at a flat fee of €1.75 per transaction. Wagestream access is set to a maximum of 50% of already earned wages at the time of the transaction.
Wagestream is a member of Finance For Good — a collective of fintech services firms committed to improving the financial wellbeing of everyday people.
“Workers are essentially giving their employers an interest free loan each month. We all work hard for our money and we should be able to access what we have earned if and when we need it. At Wagestream, we want to eradicate payday loan companies and help people avoid credit card and other high interest debt. By offering Wagestream to employees, employers can help ease the financial concerns of their staff and encourage financial wellness in the workplace. Removing the anxiety around payday naturally leads to a happier, more productive workforce with lower turnover” said Adam Hankin, Wagestream GM Ireland.
Gender division features in the results with figures showing women are more affected by financial strain at home and often have to cancel activities where men’s financial strain impacts performance and attendance at work. Overall, 71% males vs 84% females feel financial strain before payday.
The survey asked where people access additional money to tide them over and just over half (55%) approached family and friends, while a third (33%) claim that they borrow money through their credit card. 17% claimed that they use their overdraft facility and 17% went to their local credit union.
Almost 2 in 5 (39%) workers claim that they have had to borrow money to pay for an unexpected event like a car breakdown, a new dishwasher etc.
Almost 3 in 10 (29%) of all workers claim that they are unable to save any money each month. Among those who do save money each month, the average amount of money saved is €409. Male workers (€443) claim to save more than women (€370).
1 in 5 (21%) of 18-34 year olds claim they don’t save money while shockingly, a third of those over 35 claim to not save.
In addition to streaming wages, the Wagestream platform allows employees to track their spending, access financial education, and save directly from their salary. The financial wellness education on the platform will be provided in Ireland by the Money Advice & Budgeting Service (MABS) and will be tailored to the employee.
Wagestream commissioned Empathy Research to conduct this nationwide survey to reveal the payday fear facing working adults in Ireland.
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