Tesco Bank has agreed to give over 3,400 staff members a £1,250 pay rise to help with recent cost-of-living challenges.
Over 90% of its workforce are eligible for the wage increase, which was effective from 8 January 2023.
The increase to salaries, which followed discussions between Tesco Bank and union Usdaw, comes in addition to the bank’s annual pay review that is set for May 2023 – which will see further uplifts in pay for the majority of employees.
Usdaw, the retail trade union representing the bank’s staff, said that following some “challenging yet constructive negotiations before Christmas” it managed to reach a successful deal with the bank, which has been around since 1997.
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“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,” Usdaw national officer, Daniel Adams said.
“As a result, and following challenging yet constructive negotiations before Christmas, we were pleased to be able agree a £1,250 uplift to salaries ahead of the normal pay review in May.”
Adams added: “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.
“Furthermore, the approach demonstrates the value of employers working positively with trade unions,” he commented.
Tesco Bank chief executive, Gerry Mallon, also commented: “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.
“That’s why we’ve taken action and awarded a permanent increase to base pay for the majority of our colleagues.”
Mallon added that the salary increase aims to provide “sustainable, long-term support to colleagues,” including Tesco’s contact centre colleagues, “who show great commitment to helping our customers in the current economic climate.”
Last year, Britain’s biggest domestic bank Lloyds offered around 64,000 of its staff an £1,000 payment to help them cope with higher bills.
The news comes as employers are under increasing pressure to pay workers more as grocery prices rise and inflation continues to surge. The latest data showed inflation in Britain stood at 10.5% last month, after hitting a 41-year high in October.