MPs question Asda over links to app offering high-interest staff loans

MPs have written to Asda seeking assurances over the supermarket’s financial links to Wagestream, an app offering staff high-interest loans in which the retailer’s owner holds a stake, according to the Guardian.

According to the publication, the business and trade select committee said it wanted to be sure employees were not being left “facing sky-high interest rates” after Wagestream began offering Asda workers loans of up to £25,000, with repayments deducted directly from wages.

Wagestream, described as a “financial wellbeing app”, has provided Asda staff with wage advances and savings products since 2023. 

The Guardian reported that earlier this year it expanded its services to include loans with a representative annual percentage rate (APR) ranging from 13.9% to 19.9%, though rates can reach 34.9%.

A holding company controlled by Asda’s private equity owner, TDR Capital, is among Wagestream’s shareholders. 

Companies House filings show it holds a 4% stake via Bellis Financial Investments 2, alongside investors including Balderton Capital and the Joseph Rowntree Foundation through the Fair by Design Fund.

Wagestream reported a £22.2m pre-tax loss in 2024, despite seeing a 64% increase in revenues to £36.9m. 

Liam Byrne, chair of the committee, told the Guardian: “Our concern today 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.”

Nadine Houghton, national officer at the GMB, which represents Asda workers told the outlet: “It leaves a sour taste in the mouth that TDR has a financial interest in the app that facilitates Asda workers taking these financial risks while also being the overall decision maker for how much these workers are paid and the hours they are able to work.”

An Asda spokesperson told Retail Sector: “Asda offers colleagues access to a range of established financial products through a partner regulated by the Financial Conduct Authority (FCA). 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.” Asda added that 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%.”

TDR, and Wagestream have been contacted for comment.