To help staff through the rising costs of living, Tesco Bank has given a pay increase of £1,250 to 3,400 members of staff. This decision is welcomed by the Union of Shop, Distributive and Allied Workers (Usdaw) as they have engaged with the bank to urge support for their employees through the economic downturn.
More than 90% of Tesco Bank employees are eligible for this increase that has been in effect since 8 January. This increase is in addition to Tesco Bank’s annual pay review that will occur in May, with further pay awards expected for most of the staff.
Notes from the Chief Executive
Under the supermarket giant Tesco, Tesco Bank was formed in 1997. The bank has operations in Edinburgh, Glasgow, Newcastle and Reigate. Currently, according to their corporate page, they have more than 5 million customers on their banking and insurance products.
As reported by Insider, Tesco Bank chief executive Gerry Mallon has acknowledged the impact of rising costs on households throughout the country. Knowing so, Tesco Bank has taken action by awarding a permanent increase to base pay for most of their staff. This is in hopes of providing sustainable and long-term support to their employees.
Similar Steps Taken
It is known that many employees are urging additional financial support from their employers to help them afford the rising costs.
Tesco Bank is one of the recent UK companies to provide pay increase for their staff, with Natwest bank having done a similar pay rise of £2,000 to over 39,000 employees on lower pay bands. Additionally, Natwest has also given out a one-off payment of £1,000 for all staff in junior and junior management roles.
Inflation and Pay Rises
Recent numbers by the UK Office for National Statistics (ONS) show that the average pay increased by 6.4% from September to November 2022 compared to the previous year. With the current inflation rate at 10.5%, what has been the fastest pay increase in 20 years is a decrease of 2.6% in “real terms”.
The statistics by the ONS also show a record-high gap in pay rises between the public and private sectors. The rise in the private sector is 7.2%, while the public sector only experienced a 3% rise in the same period.
The director of economic statistics at the ONS, Darren Morgan, said that when taking inflation into account, the “real value” of pay will continue to fall and regular earnings have been plummeting at a record speed.
It seems that the continued inflation rise will cause more financial concerns for many. Corporate initiatives such as the pay rise provided by Tesco Bank will make a difference in employees’ households, with many struggling to afford necessary costs. Employers should have employee support as a priority during these tough times, with many considering a review of budgets to allow for financial support for employees.