Tesco educates and supports staff through salary advance scheme

Supermarket chain Tesco supports the financial wellbeing of its workforce through a salary advance scheme in addition to regular pay rises and an extensive benefits proposition.

The employer, which has 345,000 staff, initially trialled its salary advance scheme with 6,000 employees working in its large and convenience stores in Liverpool during early 2022. The feedback from the trial was positive, with 51% using the scheme to pay for an unexpected expense. It then proceeded to roll out the scheme, provided by Salary Finance, to around 280,000 UK staff in November 2022, communicating this using articles and videos on its intranet, staff emails and printed materials in offices and stores.

The scheme can help employees to pay for large or unexpected expenses, enabling them to access their earned salary early, avoiding borrowing from family, or taking on debt with high interest charges, such as pay-day loans or credit cards, explains James Goodman, people director at Tesco UK and Republic of Ireland.

“We decided to offer this as a helping hand to deal with unexpected or large expenses, such as car repairs or replacing a washing machine,” he says. “We wanted to offer a low-cost way [for staff] to access a small percentage of their earned pay for a small fee of £1.49 per advance, a maximum of once a month. We believed this could be a useful addition to the other benefits and support we offer, especially as we try to support staff to navigate cost-of-living pressures. We have an ongoing commitment to offer the best possible benefits and support, especially in recent times with household budgets under pressure.”

Tesco supports its workforce through their usage of the scheme by limiting the amount of salary that can be taken as an advance and only allowing a single advance per month. The scheme is not a loan, so there is no interest to pay. Its staff intranet has a specific section with detailed frequently asked questions about the scheme, such as how it operates, how much an employee can take as an advance, how the money is repaid and other financial details, including financial wellbeing support pages and resources.

“It is also useful to offer a salary advance scheme as part of a wider package of financial support for employees, including competitive pay rates, discount schemes where possible, financial advice and tools to help workers plan their finances,” adds Goodman.

In terms of other financial wellbeing support, Tesco offers financial help and education from its partners Salary Finance and Legal and General on a range of financial subjects, such as developing better money habits, building savings, planning for retirement and alternatives to high-cost borrowing.

As of April, its hourly pay rate for store staff was increased by 7% from £10.30 to £11.02, the third increase in the last 10 months and a combined investment of £450 million.