TSB should follow the lead of Lloyds Banking Group and Rolls Royce and give all its staff a cost of living bonus. Lloyds staff will be getting their £1,000 bonus in August; Rolls Royce staff will also be getting their £2,000 cost of living bonus in August.
TSB’s 2022 pay pot, the amount of money the bank spends on pay, was just 4% when inflation is now 11.1%. It could be almost 13% by the end of the year. On the bank’s own figures, that means every TSB member of staff will see their pay fall relative to the cost of living. Regular pay is falling at its fastest rate in more than a decade when taking into account rising prices according to the Office for National Statistics. Between February and April, when Accord’s pay deal with the bank was implemented, pay excluding bonuses, fell by 2.2% from a year earlier when adjusted for inflation.
If TSB follows the lead of Lloyds, then we would urge it not to pro-rata the payment for reduced hours staff. Whilst we understand that historically such one-off payments have always been pro-rated, TSB should make an exception on this occasion. We believe that would be supported by the vast majority of TSB staff. Energy, fuel and food costs are not pro-rated.
RPI Challenge Begins In High Court
The BT, Marks and Spencer and Ford UK pension schemes began their legal challenge yesterday to the government’s decision to replace the Retail Price Index (RPI) method of calculating inflation with the housing cost-based version of the Consumer Price Index known as (CPIH) from 2030. Members will recall that the Lloyds Trustee refused to join the legal action.
The significance of that shift is that historically RPI is higher than CPIH. The latest inflation figures for May 2022 show that CPIH was 7.9% but RPI was 11.1%.
It is estimated that 10 million pensioners will be poorer in retirement either from lower pension payments or lower transfer values because of the change in measuring inflation. The BT Pension Scheme has calculated that the reformed RPI will affect 82,000 of its 282,000 members, reduce the value of the scheme’s assets by £3.7bn, increase the scheme’s deficit by £1bn and reduce the value of pensioners’ incomes by £2.8bn. In its skeleton arguments to the High Court, the BT Trustee said that retired members of the scheme would on average be £34,000 worse off because of the change. Whilst the exact figures are going to be different, it’s clear that many TSB members, who still have their final salary pensions with the Lloyds Banking Group Pensions Trustee Limited, are going to be significantly worse off if the change is allowed to stand.
The case is expected to last for the next few days and the judgement is not expected before September 2022.
Members with any questions should contact the Union’s Advice Team on 01234 716029 (choose Option 1).