Zilch partners StepChange to tackle spikes in living costs

Zilch will become the first provider of credit via BNPL to fully integrate StepChange Direct into its digital platform. At the same time, the payments technology company also announced improved user experience to help million of customers in need easily access financial aid, if needed.

The companies have worked together closely to come up with a few steps that are currently required when asking for financial aid to make referrals to debt advice more effectively for customers in need.

Living cost on the rise globally 

Most countries have seen spikes in the cost of living in a post-pandemic world, and the UK made no exception. Since early 2021, the annual inflation rate almost doubled, reaching a 41-year high in October 2022, at 11.1%. It affected the affordability of goods and services for households, with millions of people having to pay more for rent and utilities, especially energy. 

The soaring energy prices and inflation, paired with the stagnation of salaries has led to millions of people in debt or under the poverty line, with experts estimating a working living adult in the UK would need around GBP 300 per week to reach the minimum standard of living, in 2022. By comparison, in 2021, the minimum standard of living per adult was little over GBP 230, almost 27% less than in 2022. 

To help customers in need, Zilch announced it will be making financial contributions to StepChange through the Fair Share funding programme, supporting the charity in its operations and ensuring customers will have easy access to an independent charity for a debt-free life. At the same time, Zilch became the first provider in the local industry to report customer behaviour to all major UK Credit Reference Agencies (CRAs).

So far, Zilch provided over GBP 95 million in aggregate savings to its customers, as well as a series of other financial benefits, including zero interest for instalment loans, and cashback of up to 10% back when paying by debit.

 

Long-term commitment for financial inclusion

The UK company is committed to promote financial inclusion to customers across the country, while also protecting them against debt. At the beginning of 2023, Zilch announced a new strategic agreement with reputable CRAs that will see customers’ borrowing and repayment activity through Zilch credit to influence their credit scores and profiles. The agreement will help millions of Zilch users build and improve their credit scores, without using high-cost credit products. 

At the same time, users will benefit from enhanced customer protection and financial health. Other lends will also have the possibility to access Zilch’ user database for current and historic borrowing activity, which will boost financial inclusion and diminish debt.