Supermarket chain Tesco has introduced a benefit that will allow its 280,000 employees to access 25% of their contractual salary earlier.
The scheme, provided by Salary Finance, costs a one-off fee of £1.49 upfront and aims to help staff avoid payday loans or high-interest debt.
Tesco and Tesco Mobile staff across the UK will be able to apply online for an agreed percentage of their earned wages and receive it within 24 hours of application. They can only take one advance per pay period, with the amount automatically refunded on their next payday.
The employer has piloted the scheme with over 6,000 employees working in department stores and convenience stores in Liverpool over the past year, with the average amount of the advance being £99 and 51 per cent using it to make in the face of an unforeseen expense. Three-quarters (77%) said it had given them a more positive image of Tesco as an employer.
James Goodman, UK Human Resources Director at Tesco, said: “We know that colleagues can face unexpected bills, such as car repairs or the replacement of a washing machine, which can leave them short. To give them a hand with their financial well-being, we’ve launched Pay Advance to give them an easy and inexpensive way to access some of the money they’ve already earned. We hope this will help support colleagues, especially in the run up to Christmas.
Tesco gave its hourly-paid staff a second pay rise for 2022 in October, raising pay by almost 8% over the year, and is also offering a 10% cut on groceries, rising to 15 % each pay weekend. Between December 13 and 19, the discount will double to 20%.
The retailer also offers its workforce financial assistance and training on developing better financial habits, alternatives to high-cost borrowing, and help with building savings and planning for retirement, as well as its employee assistance and MoneyHelper for all financial questions.