Supermarket Co-op will allow its 63,000 staff to take low-interest loans to be repaid via its payroll system, it has revealed this month.
The retailer said UK workers could save more than £250 million a year in interest rate charges if companies introduce a payroll loan scheme likes its own.
The scheme is being offered by financial lender, Neyber.
According to the report, its loans have a typical rate of 7.9 per cent APR, for which more than half of Co-op workers qualify for.
Workers can then make repayments directly from salaries via the retailer’s payroll system.
Co-op says by providing workers with the ability to repay loans directly, it is able to offer a practical alternative to high cost forms of borrowing, which can adversely impact on the lives of individuals and their families.
Helen Webb, Chief People Officer at the Co-op, said: “We wanted to offer colleagues more practical alternatives to high cost borrowing as we are aware that some colleagues 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 colleagues would pay on loans from other lenders.”
Its loan scheme adds to a number of other benefits currently offered by the Co-op directly through its payroll system. These include tax benefits when buying a new bike, as well as money off gym memberships.
Ms Webb added: “We know our extensive range of benefits are really appreciated by colleagues 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.”