A group of high street retailers including New Look, Next and Matalan have committed more than £800,000 to form a credit union for employees, which will offer an alternative to high-interest payday loans.
Retail Trust came up with the idea for Retailcure following a 60% increase in the number of workers contacting its helpline over the past year with financial concerns.
The charity submitted an application for formal regulatory approval at the end of May. If approved, Retailcure will launch in late 2014 or early 2015.
It will provide loans of between £300 and £15,000 to anyone working in retail at interest rates below those offered by payday lenders.
One of the biggest payday lenders, Wonga, charges a typical APR of 5,853%, compared with the 39.3% proposed by Retailcure.
Retail Trust chairman John Lovering will step down to chair Retailcure in September. His replacement will be announced shortly.
Lovering said: “Hard-working people in our sector are easy prey for payday loan companies and have to pay exorbitant rates of interest on any loans they can access.
“There is a real need for a quick source of credit for lower-paid people who work hard, but cannot get a bank loan. We want to help ensure that those who work in retail have access to responsible and affordable credit, savings and insurance products.”
Other retailers supporting the scheme include Booker, Morrisons, Ryman Group and Superdrug. Retail Trust said it hoped to raise more money in the coming weeks and months.
Retail Trust chief executive Richard Boland said: “Debt issues for colleagues and the impact it has on them are a major cause of concern for retailers of all sizes.
“[Staff] face a constant challenge balancing budgets, and without access to sensibly priced debt they can find it hard to manage the natural peaks and troughs of expenditure. This initiative will help them do that.”
To find out more and participate in the scheme, visit the Retailcure website.