The WEC Group which is a family-owned fabrication and engineering company in Lancashire has partnered with the local credit union, Jubilee Tower Credit Unionand they have created a new Employee Benefit Loan (EBL) Scheme called “FairQuid”, a first in the United Kingdom. This scheme was launched by the group after the new payday loan rules were announced that has affected thousands of people across the country.
The brainchild of this unique scheme is Wayne Wild, the Commercial Director of the WEC Group, who wanted a way where the company could offer a new benefit scheme for the welfare of their workers in addition to the other benefit schemes already being offered by the company.
With the scenario of financial crisis looming, there has been an increasing trend of credit card usage and an enormous increase in payday loans. The biggest challenge that people are facing today is debt. This scheme devised by the WEC Group offers employees an option by which they can borrow money and also gives them a way to reduce their debts and switch their loans where they are currently paying very high-interest rates. This WEC-Jubilee Tower alliance ensures that their 400-member workforce has an alternate means of borrowing. The employees of WEC can avail of the FairQuid loan, which can be processed in just 5 minutes based on the worker’s employee record, salary and service level. The aim of the EBL is to foster responsible loans and reasonable repayments without any rollover borrowing.
The idea behind the EBL scheme is very simple which approves PayDay loan for credit union. The FairQuid scheme allows an employee to borrow up to 10 percent of their annual salary and the borrowing limit is up to 20 percent of the maximum amount for each year of service. The company feels that this scheme will benefit many workers, especially the ones who have worked with WEC for a very long time. They can borrow more depending on their length of service in the company.
Many employees at WEC have applied for this scheme and are finding it very beneficial. For example, an employee borrowed money via the EBL scheme to pay off a credit card debt that was outstanding since the previous Christmas that he was struggling to pay off.
Now the creators of the EBL scheme are trying to get other companies and businesses across the UK to adopt this scheme, where they can help their staff and offer them an easy way to pay off their payday loans and other high-interest credits. This will also encourage the workers to save.
WEC, which began its engineering business in Darwen over 35 years ago, is among the largest contract manufacturing and fabrication companies in Europe. They are into the manufacture of rail gantries, CCTV towers and street furniture and since 2008, their workforce has almost doubled. However, they are still struggling to retain their skilled workers including machinists, welders and laser cutters, who are being poached by larger companies with better salary offers. The organization firmly believes that if the workers have money problems, they will bring their problems to work along with them and this will result in a completely demotivated workforce. The greatest advantage of the EBL scheme is that by solving workers’ money issues, the company is able to motivate its workers and this also helps largely in the retention of workers.
Institutions like Jubilee Tower, who is partnering with WEC in this lending scheme usually loans money to people having savings accounts with them. However, in this case, WEC is providing the worker guarantees for the repayment of the loans. It is providing all the employee details and records and the payments are directly deducted from the workers’ wages. The loan is given out on the condition that the WEC workers must start saving at least £2 in a week or £10 per month with Jubilee Tower along with the repayment of the loan amount. The workers can continue the saving even after they have repaid the loan fully.
The 2008 financial crisis has indeed changed the way people spend their money. Jubilee Tower members have borrowed lesser and saved more money and this has allowed the credit union to have surplus funds which they can lend. The EBL scheme launched by the WEC group is indeed a very innovative one and this scheme can help thousands of workers across the UK to solve their debt issues. The loan rates are between 19.7%-39.2% subject to the time taken for repayment of the loan. But the best part is that these loans do not charge the workers extra charges that are usually levied by the payday lenders.
The EBL scheme has been approved by the Financial Conduct Authority (FCA), the Bank of England and the Prudential Regulation Authority. A survey conducted by the FCA found that around 2,000 workers had been refused a payday loan for various reasons and up to 5 percent of them eventually approached their employers for a loan and borrowed money from them. Some employers have even informally lent money to workers. This arrangement has reached such levels, that one employer has even lent his personal money to distressed employees, However, this practice of personal lending has been stopped by many employers after the new rule introduced by the HM Revenue & Customs that any such lending should be brought to their notice.
The EBL scheme is one of the many worker benefit schemes launched by the WEC group. Some of the other benefit schemes include:
- The “Cycle to Work” scheme, which is a wonderful way to reduce environmental pollution and also promotes a healthy lifestyle among the workers.
- Childcare vouchers that enable working parents to get plenty of savings on child care.
- The “Refer a Friend” employee referral scheme gives money as a reward to employees for referring a friend to fill any job vacancy.
- The “Health & Wellbeing Scheme” helps to cover all the day-to-day health expenses of employees who have been with the company for at least 12 months. This covers prescriptions, dental and optical expenses and cash back for many other medical treatments. This plan also allows saving for the workers on other things like gyms, spas, theme parks, holidays, etc.
WEC firmly believes that the FairQuid EBL scheme will benefit their employees and the company hopes that this will encourage saving and foster good money management practices.