The 2022 pay pot, the amount of money the bank spends on pay, is just 4% compared to the current inflation rate of 7.5%, which is the highest it’s been since April 1991. And let’s be honest, that inflation figure is likely to get higher over the next few months.
On the bank’s own figures, that means every TSB member of staff is going to see their pay fall relative to the cost of living.
When combined with the effects of tax changes (including the new social care levy and freeze in the personal allowance), inflation at this level has significant implications for living standards. According to the Institute of Fiscal Studies, Britain’s leading independent microeconomic research institute, “an individual with a salary income of £30,000 in April 2021 (and post-tax income of £24,060) would need to see nominal wage growth of 7.1% to April 2022 to maintain the same standard of living given the forecast 5% annual inflation rate”. If we use the same example but based on the latest RPI measure of inflation, then the wage growth figure is just over 9%.
That’s how much TSB staff will need just to stand still.
Pay Proposals
TSB’s pay proposals are as follows:
- A pay pot of just 4%.
- Everyone at grades B-F will get a minimum pay increase of £500.
- Fixed pay matrix for staff in grades B-F. This matrix will provide for salary increases of between 2.5% to 4.5% depending on in position in scale.
- Staff who are near or above the maximum of their pay scale will receive a salary increase of 2.5%.
- The minimum salary for grade B staff will increase to £21,000.
- The grade C pay range will be increased by 10%; the grade D-E pay ranges will increase by 5%.
Bonuses v Basic Pay
TSB also announced that eligible grades B-F staff will get a Variable Pay Award of 10.2%. Bonuses are welcome but it’s basic pay rises that are important because those have knock-on effects on other benefits.
The two in-house staff unions are hoping that the TSB bonus award will get them off having to do anything on basic pay. In fact, it seems they only had two meetings on pay and were told what was happening by the bank. There were no negotiations.
Both unions can’t agree with the bank’s latest pay pot because it’s derisory, but they don’t want to reject it yet because that would require them to do something about it. In their joint communication, the two bank financed unions said: “the (pay) budget is below the current rate of inflation. That said, in terms of total reward, TSB colleagues will fare better than most employees in the UK in 2022”. Accord has a history of avoiding conflict and Unite are too insignificant in TSB to do anything meaningful. So, both unions are hoping that the TSB bonus award will give them enough cover to agree the bank pay pot proposals.
We will be producing a further analysis of TSB’s pay proposals in future Newsletters. In the meantime, members with any questions can contact the Union’s Bedford Office on 01234 716029 (Choose Option 1).