Supermarket Workers Seek Loans the Most for Unexpected Expenses

May 21, 2019 11:45 AM EDT | By Staff Reporter

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Despite increases made to the National Living Wage, the staff at four of the leading UK supermarkets continue to seek out high-cost short term credit - according to award-winning credit brokers CashLady.

Using data compiled from over 700,000 payday loan requests received between January 1, 2017, and December 31 2018, the credit loan company were able to highlight a growing crisis for workers in the supermarket retail sector.

Tesco, Asda and Sainsbury's were in the top five employers of people requesting short term loans. Morrisons also remained in the top ten as the 7th highest in both years.

CashLady's market analysis also highlighted the biggest reason why so many supermarket workers continue to search for financial help.

Unexpected expenses - which can be anything from high utility bills in the winter, to paying for car repairs - is causing more supermarket workers than ever to seek high-cost financial loans.

The need to apply for a short-term credit loan to pay for unexpected expenses increased from 23.91% in 2017 to 25% by the end of the following year - a worrying rise of almost 5% within the space of 12 months.

Areas worst affected include London, Birmingham, Glasgow and Liverpool; the top ten cities in CashLady's report remaining unchanged across a 24 month period.

Combined with the ongoing effects of austerity cuts made by the government in the UK, many people are finding themselves trapped in a cycle of debt.

A study by the Institute for Fiscal Studies revealed that 40% of the poorest fifth of households are in arrears or either spending more than a third of their income servicing debt.

The TUC, one of the UK's leading trade union organisations, continue to push for a minimum wage of at least £10 per hour and also compile data related to staff pay in the retail sector.

They found that while bankers are receiving record pay the average worker is still worse off than they were a decade ago.

These figures add to a growing sense of frustration felt by employees, which has seen a series of equal pay disputes go to court this year.

Cases brought by staff at Tesco, Asda and Morrisons are claiming that female shopfloor workers are earning far less than male employees employed within their distribution centres.

The Court of Appeal recently upheld an Employment Appeal Tribunal ruling at Asda that staff - who are mostly female - can compare their role with higher paid warehouse workers, who are mostly male.

Similar cases are currently being brought against Tesco and Morrisons. If successful, there are fears it could lead to a wave of claims that could cost the big four supermarkets anywhere up to £8 billion.

While Sainsbury's have yet to experience similar accusations, they were under the spotlight in mid-2018 for changes made to staff contracts.

Paid breaks and Sunday premium pay were scrapped in a bid to streamline contracts. It is estimated this had a negative impact on almost 9,000 of their employees across the country.

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