Retail organisation Co-op has launched a payroll loan benefit for 63,000 UK employees to help staff mitigate the potential financial stress caused by high-cost borrowing and personal debt.
The benefit, provided by Neyber, was introduced in June 2018 to provide eligible employees with access to a loan scheme where repayments are paid directly from employees’ salaries. The payroll loans have a typical annual percentage rate (APR) of 7.9%, which would mean that over half of Co-op’s employees would qualify to receive a loan.
The new payroll loan benefit forms part of the organisation’s financial wellbeing strategy, and will run alongside its two credit unions, the Co-op Credit Union and the Value Credit Union.
Other benefits included within Co-op’s financial wellbeing approach are interest-free loans to cover the deposit on a rented property, interest-free season ticket loans and a scheme that provides tax benefits when buying a new bike.
The payroll loan was communicated to employees via the staff intranet and a desk drop leaflet.
Co-op’s employee benefits package also features discounts towards its food, funeral care, legal, beds and electrical businesses, a 20% discount on memberships at Nuffield Health fitness centres, an employee assistance programme, health assessments, a death-in-service benefit, personal accident cover and a workplace pension.
Helen Webb, chief people officer at the Co-op, said: “We wanted to offer [employees] more practical alternatives to high-cost borrowing as we are aware that some [employees] have personal debt issues that can lead to stress and impact on home and working life.
“Because the loans are paid directly from salaries, they are almost certainly at a lower interest rate than [employees] would pay on loans from other lenders. Neyber will work alongside Value Credit Union and Co-operative Credit Union, which have been offering savings and loan accounts to Co-op [employees] for 30 and 20 years respectively.
“The Co-op is founded on a set of values and principles describing a different, fairer and better way of doing business and that relates as much to our [employees] as to our members and customers.
“We know our extensive range of benefits are really appreciated by [employees] and are an important part of the overall package which makes the Co-op a very special place to work. That is why we put so much work into offering a total benefits package that in many cases is better than anything offered by our rivals.”
