Asda has strongly denied claims from MPs and union bosses that it is has been helping to “squeeze staff” to drive profits to its parent company through the use of high rate loans.
The Guardian reported the Business & Trade Select Committee had written to the supermarket over its links to the financial wellbeing app Wagestream, which offers staff loans of up to £25,000.
It revealed a holding company controlled by Asda’s private equity owner TDR Capital is a shareholder in Wagestream, which has been offering Asda workers a range of other services, including savings pots and wage advances, since 2023.
Under Wagestream’s “workplace loans”, debt repayments are directly deducted from workers’ pay packets.
Liam Byrne, chair of the Business & Trade committee, told the newspaper he had written to Asda “to ask them to reassure us that frontline workers aren’t left facing sky-high interest rates, and that its workplace lending is compliant with Asda’s legal requirements under employment law”.
He added: “Asda is one of Britain’s most important employers, with over 150,000 workers and is at the heart of our grocery market.
“Our concern is that instead of easing Asda’s debts, its parent company may be piling pressure on Asda’s people – squeezing staff to service liabilities and drive profit to its financial investments. If this is the case, it raises serious questions as to Asda’s responsible stewardship, and the long-term financial sustainability of the business as a whole.”
The Guardian claimed Asda did not flag its financial link to Wagestream to staff when it initially launched the service to workers two years ago. Wagestream started offering “workplace loans” to Asda staff earlier this year.
An Asda spokesman said: “Asda offers colleagues access to a range of established financial products through a partner regulated by the Financial Conduct Authority. These include salary advances, workplace loans and savings products paying a competitive interest rate of 4.33%, which is currently used by more than 18,000 colleagues.
“Many other large employers, including all of Asda’s direct competitors in the grocery sector, offer similar products to their employees through the same, or competitor providers.”
He added all applications for Wagestream’s workplace loans were subject to “robust affordability checks” before being approved. “At present, fewer than 2% of Asda colleagues have taken out a loan. The representative APR on these loans is 13.9%.”
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