The UK’s hospitality sector is 3.2 million strong, representing about 10% of the employment market. However, the hospitality industry workforce continues to struggle with poor pay as tax hikes, loss of business, and squeezed profit margins impact their livelihoods. This has been compounded by the fact that the industry hasn’t quite been able to recover fully and sufficiently post-pandemic.
With rising prices and continued inflationary pressures, the UK’s hospitality workforce is living paycheck to paycheck. In such times, credit options by ethical lenders like Salad can help manage short-term expenses such as financial emergencies.
Ethical credit options often come with transparent terms and conditions, with affordable and low-cost loan options. They’re also more likely to be inclusive and suit a range of credit profiles, including those with bad credit. This makes for relatively hassle-free borrowing, especially for those in the UK’s hospitality sector who have limited access to improved credit options due to low pay.
In this article, we explore how ethical lending is empowering the UK’s hospitality workforce.
Ethical Lending Protects Hospitality Workforce From Predatory Lenders
Borrowing is always meant to be tempered with caution, as the lending market continues to harbour unsafe and unethical lending practices. Despite the rise of fintech services and innovation in the financial domain, predatory lending poses a risk, especially for vulnerable borrowers.
The UK’s hospitality sector workforce is particularly vulnerable as they face below-average pay, employment uncertainty and limited access to fair credit options. This can make borrowing seemingly risky for them as they’re more likely to fall for misleading marketing tactics often used by predatory lenders.
With ethical lenders, individuals from the hospitality sector and other low-paying industries can borrow with peace. Most inclusive lenders are FCA authorised and offer fair terms and conditions with affordable credit options.
Supports Financial Inclusion and Equality
Ethical and inclusive lenders put people above profits and care about their equality and inclusion in the larger scheme of things. This humane touch and empathy put them a notch above other traditional lenders like banks, who often have stringent loan requirements.
Ethical lenders also cater to a wide range of credit scores, making them inclusive to those with bad credit. This is a common issue faced by those in low-wage industries like the hospitality and private services sectors.
By promoting and supporting financial inclusion, ethical lenders are making credit more accessible, helping workers across various industries who are struggling to make ends meet.
Promoting Financial Literacy
Unlike traditional lenders that care only about loan criteria and credit scores, ethical lenders go above and beyond by offering credit and providing financial literacy. This is because, for ethical lenders, lending credit is more than just a business and serves a meaningful purpose.
The purpose is to contribute to the financial well-being of borrowers and to ensure they’re managing their credit responsibly and are financially secure. Ethical lenders keep the long-term consequences of borrowing in mind and advise their borrowers about how to manage their finances better.
Promoting financial literacy this way can help workers in struggling industries become educated and aware of how credit works and how borrowing impacts their credit profiles. This can allow individuals to be financially prudent and well-equipped to deal with emergencies such as a loss of job.
Ethical Lenders: Credit Unions and Online Direct Lenders
Now that you know how ethical lenders operate and how they’re transforming the borrowing landscape, you may wonder where or how to find them. Your best bet for ethical lending options is online direct lenders like Salad and your local credit union or a financial nonprofit organisation.
These lenders are ethical and inclusive, recognised by the FCA and offer fair credit options. They tailor-make their credit options to suit your unique financial situation, assessing your loan affordability criteria based on more than just your credit score.
This allows them to offer you low-cost options with flexible repayment. You do not have to worry about legal jargon and complex terminology in their loan documents, as they’re transparent and upfront about loan costs. These can be a boon for low-wage earners who can find the financial system less than equitable and often inaccessible.
Conclusion
With more and more employers partnering with ethical lenders, workers in low-pay industries like the hospitality sector can look forward to improved access and inclusion. This can greatly contribute to the financial well-being of workers and bring them peace of mind.
Ethical lenders support financial resilience and long-term financial health. As a result, individuals in other sectors, such as gig workers, freelancers and those with unsteady incomes, can now borrow with confidence.
With improved financial literacy, workers can now make informed decisions, budget smarter and save for their future. This long-term focus on borrower well-being helps workers and individuals across various industries develop responsible borrowing behaviours, boosting their financial future.
