Exclusive: financial giant Royal London unveils permanent £1k salary boost for lowest-paid staff

Life and pensions mutual Royal London, a major employer in Scotland, has joined firms boosting staff paycheques to help manage the cost-of-living crisis – and is implementing a permanent £1,000 salary boost for those earning less than £40,000 a year.

The organisation, which has around 1,500 workers in Scotland, said it is making the changes to help relevant staff deal with rising costs this winter – overall deeming the move “the right action to take” and ahead of what it expects to be a prolonged stretching of purse strings due to higher bills.

The increase will take effect in October, and will see all permanent and fixed-term employees with a full-time equivalent (FTE) salary of less than £40,000 receive a FTE salary increase of £1,000.

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Royal London – which since 2019 has been headed by chief executive Barry O’Dwyer and has major sites in Edinburgh and Glasgow city centres, in Thistle Street and West George Street respectively – said the boost is in addition to annual salary reviews that will take place in April

Moves by its peers include one-off payments for staff, with insurer Aviva recently saying it would be giving staff earning under £35,000 a payout of up to £1,000, and Nationwide announcing a £1,200 boost for those under the same threshold; or investment giant Abrdn saying its employees that earn under £75,000 – around half of its 5,000-strong global workforce – would see their pay rise for 2023 brought forward to October to alleviate cost-of-living concerns.

A spokesperson for Royal London, which says it is the UK’s largest mutual life, pensions and investment company, said: “The increased cost of living is continuing to create uncertainty and worry for everyone, and we are acutely aware that our colleagues are facing their own pressures at home. A key element of our purpose is to help build our customers’ financial resilience – but this also extends to that of our colleagues.

"We decided that a permanent increase to base salaries for those earning less than £40,000 is the right action to take, as we feel this better reflects the likelihood that the cost of living will remain at higher levels, even when inflation falls back to a more normal rate.”

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Royal London group chief executive Barry O’Dwyer, whose previous roles include leading what was then Standard Life Aberdeen’s UK business. Picture: Chris Close.