1 in 5 borrow money to pay for Christmas costs according to new research by Wagestream

Christmas can be a costly time but this year, Irish workers paid monthly are facing into a 5 week January potentially resulting in a 42 day pay gap according to new research commissioned by Wagestream, Ireland’s first income streaming app. Wagestream allows employees to access a percentage of their own, earned wages before payday, reveals how financial strain is impacting workers in Ireland over the Christmas, prompting them to borrow money, enter an overdraft, or access high interest payday loans.

1 in 5 (20%) workers report a need to borrow money to cover Christmas costs.

17% of ABC1s claim to borrow money compared to a quarter (25%) of C2DEs.

More than three-quarters (78%) of workers say that they feel financial strain before their pay cheques arrive.

January 2020 is a 5 week month. If Irish workers, paid monthly, are given paychecks before Christmas, this could result in a 42 day, or more, pay gap.

Almost 1 in 5 (18%) workers claim that they have used or thought about using a payday loan company to bridge a financial gap with 6% claiming to have actually used a payday loan company in the past.

Almost half (48%) of workers reported that financial strain has resulted in them having to cancel activities with family and/or friends while more than 2 in 5 (44%) workers claim that financial strain has resulted in stress and pressure at home.

Available through employer pay-roll, the Wagestream app allows employees to avoid borrowing money or taking out high interest loans by giving them flexible access to their wages as they earn them at a flat fee of €1.75 per transaction. Wagestream access is set to a maximum of 50% of already earned wages at the time of the transaction.

The average time required for a company to set up Wagestream and make it fully available to their employees is less than a week.

Wagestream is a member of Finance For Good — a collective of fintech services firms committed to improving the financial wellbeing of everyday people.

“Christmas can be hugely stressful for many households, as there is massive pressure to deliver the perfect day for all the family. Children are bombarded with adverts showing expensive must-have toys, and families end up over-spending on Christmas in an attempt to keep up with the Joneses, which can result in expensive interest payments for credit card debt and loans in January. Wagestream wants you to enjoy a debt-free Christmas and you won’t have to endure the financial hangover in New Year,” said Adam Hankin, Wagestream GM Ireland.

The survey asked where people access additional money to tide them over and just over half (55%) approached family and friends, while a third (33%) claim that they borrow money through their credit card.  17% claimed that they use their overdraft facility and 17% went to their local credit union.

In addition to streaming wages, the Wagestream platform allows employees to track their spending, access financial education, and save directly from their salary.

Wagestream commissioned Empathy Research to conduct this nationwide survey to reveal the payday fear facing working adults in Ireland.