ImpactAlpha, September 9 – The London-based startup partners with employers to help employees contribute automatic savings and refinance debt.
The company launched in 2015 to address the U.K. workforce’s financial security problem: 40% of Britons have less than £100 in savings ($129) and escalating debt. Salary Finance works with companies like telecoms group BT, CapGemini, and Virgin Active, to offer low-cost loans and savings accounts as part of company benefits packages. The loans are available to help employees pay off higher-cost debt; the savings accounts, offered through third party banks, can be linked to the payroll for automatic contributions.
Salary Finance claims employees can save on average £600 in interest, pay off debts up to 12 months sooner, and improve savings and credit scores. The availability of Salary Finance’s benefits also reduce companies’ employee turnover, a case study from Harvard found.
Salary Finance’s $20 million Series B was led by U.K. venture fund Blenheim Chalcot and financial services firm Legal & General. The funding, which brings Salaray Finance’s total raised to almost $80 million, will be used to support the company’s launch in the U.S. Salary Finance will partner with non-profit United Way to roll out its benefits package to about 250,000 employees as a first phase.
Other startups like Even and Albert have raised millions in the U.S. to solve a similar financial health crisis among mainstream Americans. Such approaches have drawn criticism While these companies support individual financial planning and good habits, Anand Giridharadas in his new book, “Winners Take All,” recently called attention to their band-aid approach to deeper, systemic insecurity and income inequality.