About us

Thrive is set up by Funding London, a venture capital company bridging the finance gap for early stage businesses based in London. With over a decade’s experience in supporting the startups of London through a variety of funding vehicles, Funding London sensed a need to illuminate the ever-evolving scenario of London’s early stage businesses.

Thrive features interviews with and opinion from budding entrepreneurs, investors and industry experts. A mix of contributors from all areas of the industry is desired in order to spark genuine discussion about ongoing critical issues. While it showcases the effectiveness of successful ventures, it also encourages sharing lessons learned from missteps and unsuccessful projects.

Visit Site


Funding London


020 7043 0739

Fourth Floor

5 Chancery Lane
London, WC2A 1LG


Trends · 4 February '20

The Hidden Cost of the Monthly Pay Cycle

Can you think of any major aspect of human life that hasn’t become faster or more efficient in the last 100 years?

Chances are, you can’t.

Living has come a long way, but there’s one thing, that over the last 100 years, has actually gotten slower for the end-user, one thing that we all probably think about on a daily basis, and that’s our pay.

At the turn of the last century, workers got paid as they worked, had more control over their finances and as a result, had a positive daily interaction with their employer. Now the majority of Europe is paid just once a month.

Whilst this has mainly been driven by cash flow and cost requirements [payroll is expensive to run], you only have to look at the 3.1 million people in the UK turning to payday lenders in between pay cycles to see that this system causes as many problems as those it tries to solve.

And we get it, it was simply not sustainable for organisations to continue to run payroll on a daily or weekly basis so there are limited options, but ultimately the best interests of employees are not being met.

Here at Wagestream we want to challenge the norm of the monthly pay cycle and provide employees and employers with a solution that works for both, so we did some research to look at the hidden costs of such a rigid system and what access to more frequent and flexible income can achieve.

The monthly pay cycle creates a feast and famine phenomenon

A recent survey by Portafina found that the monthly pay cycle drives irregular spending, or the ‘payday billionaire’ effect, where employees feast on wages they previously didn’t have access to. This feast in the earlier part of the month exposes them to a cash flow/liquidity issue, that gets worse as they get to the last week of the month.

Smoothing between data points assumed (100%, 43%, 81%, and 12%)

The survey shows that within just 24 hours of payday 43% of disposable wages have been spent and by day 23 of the month employees are at significant risk of not being able to meet unexpected expenses as they enter the famine period of the month.

The contrast between the famine at the end of the month and the feast employees feel as payday comes around again leads to continued irregular spending and a ‘spend it while you’ve got it’ mentality. And so the trend perpetuates itself.

Data from our users reflect this lack of cash flow as the majority of transfers or income streams (41%) happen during the last 7 days of the month when employees start to feel the shortfall. It’s an issue that’s become the reality for many working people.

Wagestream transfers increase throughout the month as employees face trouble

72% of transfers are made within the last 2 weeks and 41% are made in the last week before payday

With access to income streaming, Wagestream users can effectively manage the shortfall, and not fall into debt or the hands of predatory lenders [such as payday lenders] between pay cycles.

Current options can lead to unnecessary cycles of debt

Current options are often highly unsuitable for most needs and financial situations as they’re expensive, over-provisioned and not available to everyone.

Looking at averages from the FCA it’s clear to see that the current solution does not match the problem.

What’s more, by looking at Wagestream usage data we can see that when employees do stream, it’s only by smaller amounts, mainly of £100 or less. It clearly demonstrates that most options available over provision on employees needs plunging them into unnecessary and expensive debt. The maximum most Wagestream users transfer is approximately only 8% of their income. Because employees know it’s ‘their earned money’, they are much more responsible with its use, and only use it for emergency spend.

Compared with access to earned wages, existing options are not sustainable and leave employees burdened with debt, making it even more difficult to tackle any future financial issues, beginning the negative credit cycle.

We think Chris, a Wagestream user, put it pretty well . . .

‘I’d rather take 100 quid from my wages that I’ve already earned and know my emergency is sorted, as opposed to borrowing 100 quid off a payday loan company and over 6 months have to pay 325 quid because of the 1000%+ APR’

Yes, Chris, you got it!

A survey by Finder found that as much as 75% of payday loans users return to the service up to 6 times per year. That would be pretty expensive for Chris.

Necessities become extremely expensive under existing options

To put it plainly, we’ve compared the cost of three everyday items when financed with a credit card, payday loan and overdraft to the cost of the items when paid for through effective access to employees own income. Whether you go for the meat or vegan option is really up to you.

While we can all probably avoid the expensive burger, it would be hard to live for any length of time without a washing machine. Options available in the current system can mean that necessary items can cost three times more than they should and have a lasting negative impact that could otherwise have been quickly overcome through adequate access to earned wages.

Access to earned wages leads to a more managed approach over time

Wagestream usage data has also shown that transfer frequency and size reduces over time as stress levels, finances and wellbeing improve. What this proves is that access to income streaming doesn’t just help in a one-off situation, it actually stops employees getting into spiralling debt meaning they can better weather financial storms in the future, and therefore reduce the need for future streaming.

As employees are better able to tackle unexpected financial issues without turning to dangerous and expensive credit options, their future finances are protected and sustainable.

Through access to income streaming, 76% of users feel less stressed about their finances and 56% feel their financial situation has improved. Practically it means that 49% of our users have avoided using a payday loan to cover an unexpected expense.

It’s easy to see that the monthly pay cycle is outdated and carries significant hidden costs for employees, however for businesses to move to more flexible or frequent pay is expensive and inefficient. Wagestream has been designed to sit perfectly between payroll systems and employees, to help employees manage their flow of cash.

Don’t get left behind. Get income streaming.

As the world moves to a more on-demand lifestyle, employee’s expectations and needs are changing. One of the key drivers of workplace sustainability is better employee engagement. In many cases, paying staff is the most positive aspect of the employer/employee relationship,  so why not challenge the norm of the monthly pay cycle, and empower employees to better control their finances, strengthening the most impactful and engaging bond of all, pay.