In 2021, we reflected on our Impact Journey and caught up with some of our social tech ventures that continue to play a leading role in helping the UK level up. In this short interview, Callum McCaig, Director of Strategic Communications at Wagestream, talked to us about the change they want to see in the world, the impact of the pandemic on their users and how social investment from the Fair By Design Fund, of which Social Tech Trust is part of, has helped them deliver impact at scale.
Q. Tell us about the change you want to see in the world.
A. We set up Wagestream to tackle in-work financial stress – something that affects most of the working population. Much of the problem is caused by outdated processes and attitudes towards the way people get paid, and it compounds social issues like financial exclusion.
It’s a problem we now have the power to solve. By delivering fairer financial services through employers, built around a more flexible pay cycle, we can replace reactive money management and financial stress with proactive money management and financial control. By harnessing the power of pay and giving workers a fairer financial system to build their lives around, we can build a better working world that’s underpinned by happy, healthy, financially-empowered people.
Q. Describe what you do.
A. Launched in 2018, Wagestream is now the world’s most widely-used financial wellbeing platform. Offered through employers like Halfords, Pizza Hut, Greene King, Clipper Logistics, Bupa and Virgin Care, it gives almost a million workers a set of financial education, budgeting and savings tools, built around flexible access to their pay, all in one smartphone app.
Wagestream is part-owned and accountable to leading impact funds like Fair By Design and operates on a strict social charter of improving the financial wellbeing of people in work.
Q. Tell us about your users and how have they been impacted by the pandemic?
A. In-work financial stress has long been a problem in the UK and beyond. But there is no doubt this worsened over the course of 2020-2021.
More than 40% of those in the UK – almost 27 million people – have suffered from low financial resilience and poor financial health over that period (FCA Financial Lives Survey) – up from 24 million the previous year. We see a similar trend among the workforce, with around half of people in work feeling financially stressed over the past year; well over a third (40%) say it has impacted their mental health.
It’s been incredibly rewarding, though, to see users gradually building up their savings, making more use of the education and budgeting tools and feeling more in control, as they look to get back on track with their finances with lockdowns ending and industries like retail and hospitality re-opening.
Q. How did you respond to the needs of your users during the pandemic?
A. Within weeks of the first UK lockdown, the company rolled out a range of new features to help organisations communicate with employees and provide financial support – all available for an employer to roll out within 24 hours.
These included:
> Infostream – using the Wagestream app for company-wide Covid updates
> Furloughed staff payments
> Statutory sick payments
> Colleague payments, to help fund purchases such as PPE or transportation
> Overtime payments, for employees working additional shifts
> Financial hardship funds, created and disbursed to financially vulnerable employees
> A Covid resource hub, with useful information and updates for employees
Q. How have the broader social issues that you’re addressing changed?
A. At Wagestream, we started by giving people more flexibility over how they get paid. And while the tech is new, the problem developed over fifty years: in countries like the UK, we used to be paid a fair wage for a fair day’s work. But as banking evolved and processing transactions became expensive, companies began paying people weekly and, eventually, monthly. Combined with underlying social issues like financial exclusion, that extended, locked pay cycle has created a ‘liquidity debt trap’ for people in work. And of course, as our working lives become longer and the middle classes become even more squeezed, the problem of in-work financial stress is becoming more urgent.
From developing to developed countries, we increasingly live in a ‘fintech’ powered world. Yet, the benefits aren’t evenly distributed. The upsides of fintech have largely accrued to well-paid knowledge workers, while front-line workers continue to be ignored or marginalised. The bottom 50% of earners live paycheck to paycheck, but pay more for credit, insurance, advice, and savings than the top 50% of earners. That’s why we’re providing an increasingly broad set of fairer financial services, all through the employer and one smartphone app.
Q. How did Social Tech Trust’s support prepare you for this journey?
A. We can’t praise Social Tech Trust enough. It has been more than just an investor – always on hand to offer guidance on our growth, our social mission, and how we can ensure we stay true to our social impact charter while still growing a commercially sustainable business.
Not only that, but it’s also an important part of our investor mix – helping more traditional, growth-focused investors understand what it means to build and commercially scale an impact-accountable business.
Q. What role do you think purpose-driven technology plays in shaping a better future?
We’re incredibly proud to not only be one of the world’s fastest growing social impact businesses, but in particular, to be leading in technology for financial wellbeing. We consistently find that being backed and guided by leading charities and impact funds means we are more disciplined on the problems we solve, we make product decisions for the right reasons, we can hire people who are more passionate, and we’re seen by employers and end-users as a more trustworthy provider.
We believe passionately that by scaling an industry-leading technology company which achieves ‘profit with purpose’, we’ll be able to inspire more like-minded founders and encourage more investment in purpose-driven technology companies.
Q. What’s next for Wagestream?
A. The mission remains the same: improve the financial health of hundreds of millions of people.
Over the next 18 months that will mean:
> Building out a broader set of fair financial services for workers to access, all built around fair and flexible pay – going beyond just education, budgeting and savings
> Bringing financial wellbeing to more people in more countries, supporting our growing teams in countries the United States, Australia and Spain
> Bringing peers, policymakers, regulators, researchers and employers together, working together to solve more problems and share insights and data through the likes of our bi-annual Impact Assessment
Find out more about Wagestream.
Published November 2021.