Given the economic uncertainty why would you agree to another 2-year pay deal for staff in grades A-C when the Bank is only proposing a one-year pay deal for staff in grades D-G? That’s what the Bank-approved staff unions have agreed, again. Equally, staff won’t be fooled by the headline figure of £1200; it’s been a pay squeeze for staff this year and that’s set to continue for another two years for the lowest paid staff in Lloyds.
The Bank’s two-year pay deal gives staff in grades A-C a fixed award of £1,200 in 2026 and 2027. Staff in grades D-E will get increases of between 2% to 4% depending on position in their pay range. Staff in grades F-G will get individual increases from a pay pot of just 2.5%.
What’s It Really Worth?
A £ fixed amount allows Lloyds to give the impression the pay increase is worth more than it really is. It also allows it to try and break the link between annual pay increases and increases in the cost of living, which is a % measure. If we look at the new skill sets for staff in grades A-C, the £1200 increase for 2026 is worth between 3.2% to 4.5%. For those staff not covered by skill sets, the increase is worth between 2.2% and 4.7% depending on pay group. That’s why the Bank – and its approved unions – have chosen to refer to a £1200 rise because it looks better than 2.2% or 3.2%! That piece of subterfuge is supported by Lloyds, Accord and Unite; all have the same interest in giving the impression the increase is worth more than it really is.
This year’s pay increase was worth 4% on average for staff in grades A-C when you factor in the ‘bring to minimum’ pay increases. It was worth significantly less than that for the rest of the Lloyds staff. However, the RPI measure of inflation, which is the definition of inflation used by trade unions when negotiating pay increases, is currently averaging 4.5% over the pay year to September 2025. That’s set to climb again later in the year. So, regardless of grade all Lloyds staff have seen their pay squeezed, yet again, and that will continue into next year.
Why A 2-year deal?
Is a two-year pay deal in the best interests of staff or Lloyds, in the current economic and political climate? Staff get certainty its true but one that means a real terms pay cut and if the economic landscape changes significantly they will be lumbered with an even poorer pay deal. Lloyds gets a real terms cut in its costs and certainty in its cost base over the next two-years when it’s on the verge of announcing its next strategic review, whatever happens in the wider economy. These factors make Lloyds the winner!
If the last few years have taught us anything it’s that uncertainty is a fact of life. All the forecasts about inflation, interest rates and economic growth have been wrong. Some are predicting a market correction equivalent to the dotcom crash of 2000. Equally, the political landscape is changing rapidly and who knows what’s going to happen in 2026, let alone 2027.
The price of certainty for Lloyds staff could be inflation rising again with staff stuck on a two-year pay deal that leaves them high and dry. And let’s be honest, Lloyds proposed the two-year pay deal for grades A-C staff because it suits it more than two separate pay deals. That’s a good enough reason for rejecting it anyway. The staff unions should have held out for more rather than accepting the first deal on the table.
We will be producing a further analysis of the Bank’s pay proposals for staff in grades D-G next week. In the meantime, members with any questions can contact the Union’s Bedford Office on 01234 262868 (Choose Option 1).
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