A startup founded in 2018, Wagestream is putting up a tough fight against payday loans by offering cheap and easy-to-set-up salary “streaming”.
What is Wagestream?
If you’re an employee and your employer works with Wagestream, you can be “paid as you earn”. With Wagestream, you can access your earned wages whenever you need them in exchange for a fixed fee of £1.75 per transfer, making it one of the most cost-effective choices in the market.
In practice, this means that if your washing machine suddenly breaks and you need to replace it ASAP, you don’t need to take out a loan that could potentially cost you a fortune in interest. And since it isn’t a loan, you’re not technically going into debt, and it doesn’t impact your credit score – your credit report isn’t even checked.
If you’re an employer, you get to offer a nice perk to your employees in return for a reasonable price and not too much effort. Wagestream says its service boosts financial well-being and productivity, contributing to employee satisfaction and performance.
Wagestream also offers a “rainy day pot” where part of an employee’s salary is put aside automatically, making it easier to save and taking away the temptation to spend the money saved for emergencies.
However, it doesn’t loan out money to employees. Many of Wagestream’s competitors offer loans as an option where repayments are automatically taken from the employee’s salary. These employee loans have an interest but are typically lower than traditional loans.
How does it work?
It’s fairly simple – enough to make you wish you’d thought of it:
For employees. Once you’ve registered with the service, you can download the app and see how much you’ve earned so far for the month. If you need to, you can withdraw up to 50% of your monthly earnings. Once you’ve made the request, the money is instantly transferred to you, and you’re charged a flat £1.75 fee for each “stream” when you receive your remaining pay. You can also access tips and articles on financial wellness that Wagestream has created with the MoneyHelper (formerly the Money Advice Service).
For employers. Wagestream says that setting up the service typically takes 7–10 working days and it provides training to all your staff who need it. There are 3 plans you can opt for with Wagestream, with pricing between £1.50 and £5 per employee. It won’t affect your cash flow because Wagestream will cover the payments from the moment they’re taken out and payday. Your company’s credit score will be checked (Wagestream says that this is “for compliance reasons”), but the service is interest-free.
Plans
1. Entry
Costs £1.50 per enrolled employee per month
Income visibility
Flexible pay
Build pots
Financial education
International transfers
2. Standard
Costs £3 per enrolled employee per month
Includes everything in the entry plan
Pre-funded account
Live financial coaches
Supermarket discounts
3. Premium
Costs £5 per enrolled employee per month
Includes everything in the entry and standard plans
No transaction fees
Premium discounts
Pros and cons
Pros
One of the cheapest salary advance options available for employees
It helps you avoid an expensive payday loan
You’re not going into debt, and it doesn’t impact your credit score
It doesn’t matter if you have bad credit
No impact on the company’s cash flow
Also provides financial education resources and a help-to-save option
Up to 6% discount at leading supermarkets
Up to 30% discount at leading retailers
Cons
You can only take out relatively small amounts as Wagestream only does earned wage payments and not employee loans
You may be tempted to overspend during the month
Employers need to spend more per month for employee discounts and other perks
Our verdict: Is Wagestream any good?
Given the alternative could be an expensive payday loan, this seems like a neat solution for people to access what they’ve earned when they need to (for a small fee each time). Because of the limit on the amount employees can withdraw, it may not work for big-ticket emergencies, but it is likely to save some users from interest payments and debt.
Frequently asked questions
As many as they want. The only limit is that they can only take out up to 50% of what they have already earned. However, keep in mind that withdrawing more in one go is cheaper than requesting multiple smaller advances.
Unfortunately not. Salary advances are a perk that employers offer to staff, so you can’t use the service if your company hasn’t jumped on the bandwagon.
No, it isn’t. You’re withdrawing money you’ve already earned, so you don’t have to pay interest on it or pay it back. It’s all yours to spend (wisely!).
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Valentina Cipriani was a writer at Finder UK. She wrote news, features and guides about banking and credit cards, helping people to improve their financial lives. She holds an MA in International Journalism. See full bio
Izzy Thomas is a Senior Associate Publisher at Finder specialising in credit-based products including credit cards, business loans and personal loans. Izzy has a Masters in Publishing and a Bachelor of Arts in International Business Management. See full bio
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