Santander UK and Virgin Money (VMUK.L) have become the latest firms to help employees cope with the cost of living crisis amid soaring inflation that is eating away real terms pay.
Santander said that it would give 11,000 employees a 4% pay increase from the start of August to “help with the increased cost of living.”
“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 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 from August 1.
Challenger bank Virgin Money has told the majority of its staff they will receive a £1,000 one-off bonus to help with the soaring cost of living.
The banking group said all of its employees who are paid £50,000 a year or less, which represents 78% of its workforce, will be eligible.
Around 6,000 people will receive the windfall as part of their August pay packet.
In a memo to staff, Virgin Money CEO David Duffy explained the bank’s rationale for agreeing to the £1000 one-off pay bump for staff struggling with cost of living pressures.
“The increase in the cost of living is on everyone’s minds, whether in political circles, in the media, or in the local supermarket," Duffy said.
“This has been echoed in what you’ve told us in pulse surveys, in our colleague engagement sessions, and other forums including discussions with our trade union.”
Caren Evans, national officer at Unite, the union representing the bank’s workers, said: “Unite has secured the £1,000 payment following a campaign to show Virgin Money UK how the increases to the cost of living is hitting the overwhelming majority of its staff.
Both firms join a chorus of banks including Barclays (BARC.L), Lloyds (LLOY.L) and NatWest (NWG.L) announcing similar pay increases for lower-paid staff after inflation in the UK hit a 40-year high of 9.1% in May.
Watch: What is a recession and how do we spot one?