4M Workers Now Paid On-Demand
PRESS RELEASE
One in ten UK employers now offer Earned Wage Access (EWA) to their staff, and this is expected to rise
As the cost-of-living crisis continues, more than four million workers are now being paid when they choose – with 1 in 10 companies now offering the option, known as Earned Wage Access (EWA) or On-Demand Pay.
With 43% of workers spending three or more hours a week thinking about or dealing with financial stress, it is hoped more employers will embrace the technology, but as there can be a small one-off fee to use it, bodies including the Financial Conduct Authority, Nest Insight and The Woolard Review have called for greater oversight of how employers provide it.
In response to that, today (4th September, 2023) seven UK providers of EWA have united with the CIPP – the professional body for payroll, pensions and reward – to launch the ‘EWA Code of Practice.’ This is a voluntary set of rules for providers of EWA across the UK, that helps ensure their products deliver good outcomes for employees using the scheme. The founding members are: The Access Group, AnyDay, Ceridian, Hastee, Level Financial Technology, Salary Finance and Wagestream.
The CIPP provided input on the code to ensure there is clarity for employers and payroll teams on EWA best practice.
Jason Davenport, Chief Executive Officer at the CIPP;
“EWA is a very hot topic in the payroll industry at the moment, so the CIPP is delighted to join forces with these organisations to ensure the Code of Practice offers our industry best practice guidance.
We would encourage organisations considering the introduction of an EWA system to visit our website www.cipp.org.uk to understand more about the code and how best to implement it within their payroll function. We are aware that 80 per cent of employees say they would prefer to have their pay automatically sent to their bank accounts as they earn it, and with 90 per cent saying they prefer EWA to credit cards or loans, it is something which will undoubtedly grow in popularity and will benefit from the industry being proactive and clear on what best practice looks like.”
Access to earned pay outside of a long, locked pay cycle is already a legal requirement in countries such as Spain, France, Italy and Portugal, and may in time become so in the UK. Government-backed research already shows that volatile and low-middle income households benefit from a more frequent pay cycle for a broad number of reasons, and nine in ten say their financial situation is stable or improved once they get paid when they choose.
Michael Royce, a Senior Policy Manager at the Money and Pensions Service commented;
“MaPS provided a consumer perspective to the EWA Group and we support the process that led to the Code’s launch. This is a welcome step forward and we hope it allows and encourages all signatories to put consumer financial wellbeing at the heart of the services they offer.”
The EWA Working Group took on board the findings of Christopher Woolard CBE, who chaired ‘The Woolard Review’ during his time at FCA. He highlighted that EWA serves a clear benefit to workers and their employers, but may benefit from tighter guidance in future.
“The earned wage access market in the UK continues to grow, providing consumers with an additional platform to manage and improve their financial wellbeing. However, with rapid growth of consumer lending products comes risk, and it is crucial that customer outcomes are prioritised by providers.
I am proud to have supported the development of the Code of Practice in response to the need for a commitment to common standards across wage access providers. However, development of and commitment to the Code is just one step. Success remains to be seen in the actions of providers to uphold these standards which will only emerge over time.”
Juliet Molholland, a Customer Service Manager at Co-Op has the option of Earned Wage Access through her employer. She says it has been a lifesaver;
“I love EWA because I can access the money that is already mine when I need it, I don’t have to wait until the end of the month. I have already earned the money, I don’t pay any interest like you would on a credit card and it’s not borrowing – it is getting what is mine [when I choose]. It’s very easy to use through an app linking the bank to my payroll.”
To read the Earned Wage Access Code of Practice, please visit the CIPP’s website: https://www.cipp.org.uk/ewa-code.
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