Over four million UK workers gain control over pay with Earned Wage Access

This move towards flexible pay comes as one in ten UK employers embraces EWA, and this trend is expected to gain further momentum.

EWA offers a lifeline to workers facing financial stress, with 43% of employees spending three or more hours per week dealing with financial concerns. With the potential to provide financial relief to many, bodies such as the Financial Conduct Authority, Nest Insight, and The Woolard Review have advocated for increased oversight of EWA offerings due to the possibility of small one-off fees associated with its use.

Responding to these concerns, seven leading UK EWA providers have joined forces with The Chartered Institute of Payroll Professionals (CIPP) to launch the ’EWA Code of Practice.’ This voluntary set of guidelines aims to ensure that EWA services across the UK deliver positive outcomes for employees using the system. The founding members of this initiative include The Access Group, AnyDay, Ceridian, Hastee, Level Financial Technology, Salary Finance, and Wagestream.

CIPP collaborated on the code to provide clarity to employers and payroll teams regarding best practices for EWA implementation.

Jason Davenport, CEO at CIPP, emphasised the timeliness of this initiative, stating, "EWA is a very hot topic in the payroll industry at the moment, so the CIPP is delighted to join forces with these organizations to ensure the Code of Practice offers our industry best practice guidance. With 80% of employees expressing a preference for having their pay automatically sent to their bank accounts as they earn it, and 90% favouring EWA over credit cards or loans, this concept is expected to gain popularity."

Access to earned pay outside of a traditional pay cycle is already a legal requirement in countries such as Spain, France, Italy, and Portugal, and this practice may eventually become a necessity in the UK.

Government-backed research underscores the benefits of more frequent pay cycles for volatile and low-middle income households. Nine in ten respondents reported that their financial situation stabilised or improved when they had control over their payment schedule.

Michael Royce, a Senior Policy Manager at the Money and Pensions Service, voiced support for the EWA initiative, emphasising the importance of placing consumer financial well-being at the core of these services.

The EWA Working Group incorporated insights from Christopher Woolard CBE, who chaired ’The Woolard Review’ during his tenure at the FCA. Woolard recognized the clear benefits of EWA for workers and employers but suggested that future guidance might enhance its effectiveness.

In support of EWA, Juliet Molholland, a Customer Service Manager at Co-Op shared her experience, highlighting the convenience of EWA in allowing her to access her earnings when needed, eliminating the wait until the end of the month, and the absence of interest payments often associated with credit cards.

The introduction of EWA represents a significant shift in empowering workers with greater control over their finances, and this trend is expected to continue reshaping the employment landscape across the UK.