By James Rodger

Copyright birminghammail

A “financial wellbeing” app is targeting low-wage workers with high-interest loans. W orkers are being offered a controversial new type of high-interest loan of up to £25,000 through the “financial wellbeing” app Wagestream. But critics say the app is making it too easy for low earners to fall into debt, by offering salary advances and loans, the Guardian reports. Adam Butler, the public policy manager at StepChange Debt Charity, fears users could face “additional borrowing, cutting back on essentials and missing bills”. Sara Williams, a debt adviser, campaigner and author of the Debt Camel blog, said she had “serious concerns too. “A business model that gets people to take increasing amounts of short-term 0% debts and then sells them an expensive loan to clear it raises serious concerns, and the employer should consider if this can really align with their workers’ best interest,” she said. READ MORE Drivers in England face new midday to 8pm ban from September 21 Nadine Houghton, a national officer for the GMB union, said: “For low-paid workers to have the ability to access credit at such high interest rates at the click of a button – it’s like payday loans.” after newsletter promotion Asda said: “Since partnering with Wagestream in 2023, thousands of colleagues have benefited from the financial wellbeing services offered. These include optional salary advances and a savings product. “For those who choose to apply for a loan through the Wagestream platform, all applications are assessed for affordability and creditworthiness in line with FCA regulations governing consumer credit.” “Our priority is to support models that can provide more affordable, responsible alternatives, using stronger data and affordability checks than were available before,” Ascension said. “This is not a substitute for fair wages or a robust welfare system but it can help reduce reliance on the most harmful forms of credit.” Wagestream said: “Wagestream was founded on a social charter to improve workers’ financial wellbeing. By partnering with employers, we help people who are underserved by traditional financial institutions to earn, learn, save, spend and borrow on their own terms. “We are proud to offer a fair, accessible alternative which helps our members to build better financial futures. We are confident that Wagestream’s products deliver positive outcomes, and we remain dedicated to building a more inclusive and equitable financial system.”