Supermarket chain Tesco has introduced a benefit that will allow its 280,000 employees to access up to 25% of their contractual pay early.
The scheme, provided by Salary Finance, costs a single set fee of £1.49 per advance, and aims to help staff avoid payday loans or debt with high interest payments.
Tesco and Tesco Mobile staff across the UK will be able to apply online for an agreed percentage of their earned pay, and receive it within 24 hours of the request. They can only take one advance per pay period, with the amount automatically repaid at their next pay day.
The employer trialled the scheme with more than 6,000 employees working at large and convenience stores in Liverpool over the past year, with the average advance size being £99, and 51% using it to deal with an unexpected expense. Three-quarters (77%) said it made them feel more positively about Tesco as an employer.
James Goodman, UK people director at Tesco, said: “We know that colleagues can face unexpected bills, such as car repairs or replacing a washing machine, which can leave them short. To give them a helping hand with their financial wellbeing, we have launched Pay Advance to give them a simple and low-cost way to access some of the money that they have already earned. We hope this helps to support colleagues, particularly in the run up to Christmas.”
Tesco gave its hourly-paid staff a second pay rise for 2022 in October, boosting pay by nearly 8% over the year, and also provides 10% discount on groceries, increasing to 15% every payday weekend. Between 13 and 19 December, the discount will double to 20%.
The retailer also offers its workforce financial help and education on developing better money habits, alternatives to high cost borrowing, and help with building savings and planning for retirement, along with its employee assistance programme and MoneyHelper for any financial questions.