Is Flexi Pay the antidote to costly Payday Loans for Newcross Healthcare Staff?
This afternoon, payday lender Wonga.com announced it is no longer accepting new loan applications. The company stated on its website that it was continuing to "assess its options" and existing customers would still be able to access their services in order to manage their loans.
The announcement by Wonga.com followed a spate of compensation claims against the firm amid a government clampdown on payday lenders. The Financial Ombudsman Service received 10,979 new complaints about payday loans between April and June of this year, an increase from 3,126 in the same period in 2017.
The Oxford Dictionary defines a payday loan as 'a relatively small amount of money lent at a high rate of interest on the agreement that it will be repaid when the borrower receives their next wages.' Available from high street shops and internet sites, payday loans are easily acquired. In many cases, borrowers aren’t required to undergo a credit check. Infamous for their controversial rates of interest, payday loans are notoriously unmanageable for those on especially low incomes. Over a year, the average annual percentage interest rate of charge (APR) could be up to 1,500% compared to 22.8% APR for a typical credit card.
On 22nd August 2018, BBC News released an article declaring that job insecurity is now "widespread", with 800,000 workers on zero-hours contracts, according to the Resolution Foundation, an independent think tank. 2.1 million more people have found jobs since the financial crisis in 2008, with 1.2 million of those in the poorest third of households. The study also found that average earnings in the UK are still £13 lower than they were a decade ago, prompting the question: Is it any wonder people are resorting to payday lenders for quick cash?
A survey undertaken by Newcross Healthcare earlier this year, uncovered that a proportion of Newcross employees had taken out payday loans to cover short-term financial emergencies in their lifetime. While Newcross offers competitive rates of pay for all healthcare staff, Flexi Pay, a new feature of Newcross' HealthForceGo® app, was imagined in response to the findings of the survey, ensuring all staff are covered.
The introduction of the Flexi Pay facility offers Newcross employees the flexibility to choose when they will be paid for a proportion of the work that they do. It allows for a mass-scale advancement of pay on the succeeding payslips of HealthForceGo® users. Up to 50% of pay from a shift can be accessed. Any tax and national insurance will then be deducted from the second half of the payment on the following pay day. Payments involve no human intervention, aside from the initial approval by the Newcross finance team. Details are taken from the app and linked to the online banking system. Provided a shift is not ‘flagged’ by the branch, has not already been paid and is verified, an advance amount may be paid to the app-user.
Flexi-Pay terms and conditions can be found here. For any further inquiries regarding Flexi Pay, please contact firstname.lastname@example.org
The Money Advice Service