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Tesco Bank offers staff 1,250 pound 'cost of living' payment

A Tesco supermarket is seen in west London

LONDON (Reuters) - Tesco Bank, owned by Britain’s biggest supermarket chain Tesco, said on Thursday it agreed to give around 3,400 members of staff a 1,250 pound ($1,540.63) pay increase to help them deal with the increased cost of living.

The bank, which has been around since 1997, said over 90% of the its workforce were eligible for the extra pay which was effective from Jan. 8.

Usdaw, the union representing the bank's staff, said following "challenging yet constructive negotiations before Christmas" it reached a deal with the lender for the uplift to salaries ahead of an annual pay review in May.

"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 in a statement.

Last year, Britain's biggest domestic bank Lloyds offered around 64,000 of its staff a one-off 1,000 pound payment to help them cope with higher bills. Executives and senior managers were exempt from the payout.

Employers are under increasing pressure to pay workers more as prices rise. The latest data showed inflation in Britain stood at 10.5% last month after hitting a 41-year high in October.

($1 = 0.8114 pounds)

(Reporting by Farouq Suleiman; editing by Sarah Young)