Salary Advance Scheme

How a Salary Advance Scheme Will Stop you from Running out of Money at the End of the Month

You know the sinking feeling: it’s the last week of the month and money is tighter than usual. You’re worried you’ll have to rely on a payday loan again. You don’t want to have to ask to defer another bill.

Know that you’re not alone. In fact, 64% of people admit to running out of cash before payday.

Enter: the salary advance. Here to tide you over until payday, you get access to a wage advance that you’ve already earned, right when you need it. It’s easy to sign up, keeps you away from payday loans, and helps keep your account balance in the positive.

Here’s what we’ll be covering:

  1. What is a salary advance scheme?

  2. How does a salary advance work?

  3. Three ways we stop you from running out of money at the end of the month

What is a salary advance scheme?

Remember pay as you go phones? You’d top up your phone every week or month with a prepaid token, and it would tide you over for the next couple of weeks. A salary advance scheme is pretty similar. 

With a wage advance, you get immediate access to your wages, as soon as they’re earned. Your employer works with a third party payroll advance scheme (that’s us!) by signing up through their HR department. They don’t need to set up new accounts or change the way they pay you: our system simply sits on top of theirs.

You get your wages early, without any impact on your workplace!

For those who find themselves running out of money, a payday loan can feel like the only other option. It can be embarrassing to ask family members for help, especially when it’s only for a few days. But payday loans can be incredibly expensive, with interest rates of up to 500%. That’s why it’s easy to become stuck in the cycle of debt, which can later affect your credit score and make it harder to get a mortgage and other loans.

Many of us will also face the odd emergency every once in a while, whether it’s tyres that need replacing or a boiler that breaks down. These emergencies often cause a lot of stress, and can kickstart a new cycle of debt. With a salary advance scheme, you don’t need to rely on family, short term loans or credit cards: you can use your own earned money.

How does a wage advance scheme work?

Salary advances are like a bridge between employer and employee.

First, your employer signs up and integrates its payroll information with the salary advance company. For example, at FlexEarn we integrate with Sage, one of the most popular payroll services in the UK.

Then, as an employee you get access to your own dashboard through an app, where you’ll find specific information about the hours you’ve worked so far this month. With real time updates, you can choose when, and how much, to withdraw. Simply hit send and the cash will enter your bank account. 

Because we aren’t a lending service, there’s no hidden charges, credit checks or interest on the money. Just a £1.50 fee for the withdrawal. You’ve already earned the money - why wait? 

3 ways we stop you from running out of money at the end of the month:

  1. Better control of your money

One of the biggest benefits that comes with salary advance schemes is that you can improve your budgeting and financial control. For someone looking to aggressively pay down debt, for example, the instant access to wages is a clear advantage. When you can make payment earlier, you effectively stop interest in its tracks and reduce the potential charges that come with getting into more debt.

Not only that, but the dashboard and interactive display that comes with a programme like FlexEarn makes it easier to track your earnings. We have a mobile app to make it easy for you to log in and check your wage every single day. With this new breakdown of wages, you can better budget and plan for the income that you’ve earned, leaving no nasty surprises at the end of the month. 

2. No need to take out short term loans

Another advantage of using a salary advance scheme is that you don’t need to rely on short-term loans to tide you over. You’ve heard of payday loans and credit cards, and you probably know that these are not the best option when you’re struggling for cash. 

Because these types of loans are so short term, the incredibly high interest often leaves you in a worse financial position. Ever heard of a loan shark? They are illegal lenders who often target people who have a low income and no other options for cash. Their interest rates are astronomical and they often threaten borrowers to get their money back.

With a payroll advance scheme, you no longer have to rely on short term loans, payday loans or any form of credit. The money you access is the money you’ve earned, and you don’t need to pay interest or go through a credit check in order to receive it. With FlexEarn, you just pay £1.50 per withdrawal.

3. Higher flexibility

We all know about the gap between when you get paid, and when your major expenses occur each month. For example, your mortgage or rent payments may go out on the 10th, but you don’t get paid until the 18th. This can create a disconnect and make it stressful for you to try and make your money last until then.

With a payroll scheme, you have the flexibility to advance your salary on the dates that you need the cash. And since you choose how much to withdraw, you also have the option to leave your entire paycheck for your regular payday. It means that you won’t be penalised for budgeting on your own terms, and can stay away from the vicious cycle of debt.  

With a salary advance scheme, you become part of the other 36% who don’t run out of money before payday. You get to bridge the gap between your bills and your budget, and therefore take better control of your money. If that sounds like something that suits you, simply refer FlexEarn to your HR department and we’ll arrange an appropriate salary advance scheme with them.