Retail lender Tesco Bank has agreed a £1,250 pay hike on a full-time equivalent basis, to help with the increased cost of living.
More than 90% of the bank’s staff (about 3,500 employees) are eligible for the pay hike with those who qualify receiving it in their pay packet for January.
The uplift to salaries, which followed talks between Tesco Bank and Usdaw and Unite trade unions, is in addition to the bank’s annual pay review which will follow in May.
Daniel Adams, Usdaw national officer, said: “As the cost of living crisis has deepened, Usdaw has continued to engage with Tesco Bank on what can be done to support employees through this incredibly difficult time. As a result, and following challenging yet constructive negotiations before Christmas, we were pleased to be able to agree to a £1,250 uplift to salaries ahead of the normal pay review in May.
Pay awards January 2023
“Not only is this a welcome step but, given this is a permanent increase rather than one-off payment, it will also flow through into other elements of the reward package, including pensions and bonus.”
Tesco Bank chief executive Gerry Mallon said: “The rising cost of living is having an impact on households across the country, and we’ve been listening to colleagues about how this is affecting them.
“The salary increase aims to provide sustainable, long-term support to colleagues, including our contact centre colleagues who show great commitment to helping our customers in the current economic climate.”
Tesco Bank is one of the last of the major banks to offer a cost of living payment. It follows Lloyds Banking Group, which decided to offer a minimum pay hike of £2,000 for its staff in the UK last November, and Natwest, which provided a one-off payment of £1,000 for all 39,000 UK employees in junior and junior management positions.
NatWest also last month announced its annual pay offer for 2023, which comprises an increase of at least £2,000 per year for UK members of staff, depending on individual performance, to take effect from 1 April.
Other banks to have made cost of living payments include HSBC, Santander, Barclays, Virgin Money, Nationwide, Co-operative Bank, Metro Bank, Monzo and TSB.
According to figures released this week by the Office of National Statistics (ONS), the average pay in the UK rose by 6.4% between September and November 2022 compared with the year before but because of inflation, wages fell in real terms by 2.6%.
The ONS figures also found that the gap between public and private sector pay was at a record high with private sector pay rising by 7.2% annually in the three months to November. Compared with this, public sector pay only rose by 3% during the same period.