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Santander UK, Virgin Money join firms helping staff with cost of living crisis

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A Santander sign is displayed outside Santander House, in Milton Keynes
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LONDON (Reuters) -The British arm of Spanish lender Santander said on Tuesday it would award a 4% pay rise to around 11,000 UK-based employees to help with the rising cost of living, as inflation cripples household budgets across Britain and beyond.

"This 4% pay raise will make a real difference to the majority of our customer-facing and contact centre staff who are committed to helping our customers and businesses prosper in the current economic climate," Chief Executive Mike Regnier said in a statement.

All employees earning under 35,000 pounds ($41,958) will be eligible for the rise, which covers 60% of the bank's UK workforce, Santander said.

The bank also said it would increase its entry level salaries to 19,500 pounds from Aug. 1.

Santander joins a chorus of banks including Barclays, Lloyds Banking Group and NatWest announcing similar pay increases for lower-paid staff after inflation in Britain hit a 40-year high of 9.1% in May.

British challenger bank Virgin Money also said on Tuesday it would give almost four-fifths of its workforce a one-off cost of living payment of 1,000 pounds in their August pay packets.

The payout, which follows an average increase of 5% in base salary in January, is not linked to the lender's annual pay review or bonus arrangements. All staff earning 50,000 pounds or less will qualify and part-time workers will receive the same payout as full-time colleagues.

"The increase in the cost of living is on everyone’s minds, whether in political circles, in the media, or in the local supermarket," Chief Executive David Duffy said in a staff memo.

Virgin Money has already launched several initiatives to help staff manage their finances including offering full flexibility on working from home, which has helped to reduce commuting costs for many employees, a spokesperson said.

($1 = 0.8342 pounds)

(Reporting By Sinead Cruise; Editing by Susan Fenton)

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