Santander, Virgin Money, Visa and Beazley have become the latest financial services companies to offer pay rises or one-off bonuses to staff to help deal with the soaring cost of living.
This week, 11,000 UK-based staff at Spanish bank Santander were told they would receive a 4 per cent pay rise to help with fast-rising inflation, which is squeezing incomes across the UK particularly for lower-earning families.
Santander will offer the pay rise to staff earning less than £35,000 — covering about 60 per cent of the workforce — and increase its entry level salaries to £19,500.
Santander chief executive Mike Regnier said the pay raise would “make a real difference to the majority of our customer-facing and contact centre staff”.
Visa has offered a 5 per cent pay increase to staff in the UK from July, according to one person familiar with the situation.
Virgin Money also said on Tuesday that it would give £1,000 to almost 80 per cent of its workforce earning less than £50,000 as a one-off “cost of living” payment in August wages.
Staff had already received an average increase of 5 per cent in base salary in January. The extra pay bump will not be factored into future pay reviews, it said.
Unite, the workers’ union, said it had helped secure the pay rise, and would continue to campaign to make sure wages increased in line with inflation.
The financial services sector has been at the forefront of offering one-off pay increases or non-recurring bonuses to help lower-paid staff in particular. Barclays and Lloyds Banking Group have promised pay rises in recent months to help many of their staff cope with costs.
UK staff at NatWest earning less than £32,000 — about 17,300 employees — will be given an unscheduled pay rise of 4 per cent from September.
Lloyd’s of London insurer Beazley also last month made a one-off gross payment of £3,000 for those earning up to £50,000, intended as help with the rising cost of living, according to a person familiar with the details.
Economists expect a further rise in the headline inflation rate from 9.1 per cent in May to a fresh 40-year high in June, driven by sharp rises in petrol and diesel prices last month. Some expect inflation to peak at almost 12 per cent in October.
On Tuesday, the Office for National Statistics said earnings grew by 4.3 per cent in the three months to May excluding bonuses, but failed to match the rate of inflation.
The pay squeeze has caused a surge in worker disputes. More than 40,000 British workers at BT Group will hold a two-day national strike at the end of this month.
Other companies are also seeking to help workers deal with inflationary pressure. Housebuilder Barratt Developments awarded all staff below senior management level £1,000 this month, which will be paid between now and December.
David Thomas, chief executive of Barratt, said the “rising cost of living is impacting on colleagues across the business but we are committed to supporting our teams”.