The Financial Conduct Authority (FCA) yesterday delivered an outline of plans to reduce the number of people using high interest credit options such as home-collected loans, in-store credit cards and rent-to-own schemes. There are 3 million people in the UK currently using high cost credit schemes and 19 million people regularly have to use an overdraft. While the plans put forward do represent a step in the right direction, simply capping prices or issuing mobile alerts fall short of the level of action that is required to make real change.
These guidelines will not be enough to prevent people paying extortionate fees to borrow before payday and experiencing severe financial stress. Reducing the reliance on high-cost credit is only possible if the people who are using these services are fully informed about the dangers of these schemes and made aware of what alternatives are available to them. After all, the FCA themselves reported that in general, consumers had a poor understanding of their own loan repayments.
Debt should not be a taboo issue; we urge politicians, institutions, businesses and employers to embrace initiatives that allow those who need financial support to access it without getting themselves into situations that can quickly spiral out of control.
Fortunately, technology can be of great use to those who need access to funds before the end of the month. Granting access to income as it is earned is a far more powerful and fair solution, avoiding the negative cycle of inflated repayments and spiralling debt. Technology allows us to control every second of our lives, but staff are still having to wait until payday for the cash they’ve earned.
Hastee Pay changes that, offering a revolutionary new way for people to manage their finances. We allow employees to receive pay immediately it is earned, making waiting for payday a thing of the past.
Financial freedom improves wellbeing and productivity, benefiting both staff and their employers (with no cost to companies and zero impact on their cash flow).