Palace pay rises | Is the King's tiny cost-of-living bonus an insult to his workers?

Is the King's tiny cost-of-living bonus an insult to his workers?

Employees of King Charles III are set to receive a bonus payment to help them with the cost of living crisis, but the payment is relatively small in comparison to the cash being offered at major firms...

As reported by The Sun, the head of state will provide household staff, such as cleaners, with a one-off supplement of £600, on top of their monthly wage, which he will pay from his own private income.

The exact amount it will cost the Monarch has not been disclosed, but the publication reported it to be in the tens of thousands.

Staff earning less than £30,000 will reportedly receive £600, with staff earning up to £40,000 receiving £400. Anyone earning between £40,000 and £45,000 will take home around £350, according to the Sun.

A source told the newspaper: "The King is giving money out of his own pocket to the lowest earners working for the household to help them cope with the cost of living crisis.

"It is to target where it is needed the most in the Royal Household and reflects the reality of the economic situation the country faces.

"The King is very much aware of the soaring energy bills people are facing and worried about the economic wellbeing of loyal palace staff and doing what he can."

‘Offensive’

However, the gesture has also been met with less flattering reactions from some. Graham Smith, CEO of political group Republic, which campaigns for the abolition of the monarchy, said the King’s one-time cost-of-living payment was "offensive" and "a ploy to persuade people he cares".

"While everyone else is facing cuts to real terms pay, public services and benefits, Charles avoids inheritance taxes and costs the taxpayer tens of millions every year," said Smith.

Are one-off bonuses the best solution to combat the cost-of-living crisis?

The Palace joins a growing list of workplaces to have stepped up financial support for their workers amid the ongoing cost-of-living crisis.

Many major firms, including supermarkets Asda, Tesco and Morrisons are among the firms to have upped pay in recent months, partly in a bid to keep hold of staff who might otherwise be lured to competitors offering higher wages.

And in July, Barclays announced it would be giving its 35,000 UK staff a £1,200 pay rise from August 1, 2022 in response to the economic downturn.

However, some firms' attempts to help their staff with growing costs have not been successful.

Unionised workers at engine maker Rolls-Royce recently rejected an offer which would have seen staff receive a one-off £2,000 bonus. Bosses at the union Unite said the move fell "far short of the real cost of living challenges which our members are experiencing".

Taking a different approach to monetary support, the John Lewis Partnership also recently announced that it would be offering employees free meals over the winter months, partly as a way to help them keep household costs down.

But Kate Bell, the Head of Economics at the Trade Union Congress (TUC), said one-off or temporary gestures don’t go far enough.

“Of course workers will take any form of help they can get this winter,” Bell said. “But the only real way to give working families security is a decent pay rise. One-off support is not enough. We need to get wages rising across the economy to end this living standards crisis.”

However, the TUC call for wage rises is not being heeded by many firms, and this is an issue that could lead many employees to look elsewhere for new jobs.

In fact, new research from recruitment agency Aspire reveals that 45% of workers have been waiting more than 12 months for a pay rise, as inflation hits 10.1%.

Additionally, a recent study from the Chartered Management Institute (CMI) found that 48% of UK firms had no immediate plans to offer salary raises.

What are some alternatives to bonuses or pay rises?

Even if the King felt compelled to increase the cost of living payment, a higher financial package might not necessarily be the most impactful way to support employees with financial wellbeing, particularly if the raise does not surpass the rate of inflation.

Therefore, it’s also worth the time to consider other financial wellbeing options. In fact, research published in 2022 from global life insurance provider MetLife found that one in two employees would sacrifice more of their basic salary to get a personalised employee benefits package.



The research was conducted as part of MetLife’s Re:Me report, which looks at how the pandemic has shifted attitudes in the workplace. Among its findings was the discovery that 69% of employers said they’d work harder for an employer who provided benefits that were tailored to their individual needs.

And they’re not looking for 'soft' perks like gym membership or employee discounts (many of which, in any case, became obsolete during lockdown and the peak of the pandemic). Income protection was the 13th most desired benefit prior to the pandemic; MetLife’s research discovered that it now stands at 3rd, with a further 58% of employees stating that they’d like their benefits package to cover all their dependents, including their spouse.

There are also other steps that employers can take to help employees make their money go further. Below, Towergate Health & Protection suggested:

Salary sacrifice

Offering a salary sacrifice scheme enables employees to maximise their pre-tax income. Employees can pay a comparatively reduced price on things like childcare costs, commuting to and from work, and even their pension. If an employee is close to the higher rate income tax band, a voluntary increase in their monthly pension contribution could help them to stay within the 20% basic rate tax band.

Expert guidance

Expert guidance is often more easily, and freely, available than people realise. In fact, it may already be provided as a cost-free add-on to other health and wellbeing support. Employee assistance programmes (EAPs) often form part of the offering within other employee benefits, such as group risk benefits, and can provide confidential advice to employees on a number of concerns, including money worries.

Employee discounts

Employee discount schemes can help employees’ money to go further. Cashback cards can be made available for everything from the weekly grocery shop to clothes, DIY items, and days out. These come at a variety of costs, depending on the offer, or are sometimes even free to encourage store loyalty. Some employee discount schemes also provide access to a free credit-checking service, and money advice lines, to help employees to keep on top of their finances.

If the King can't get financial wellbeing right, how can HR?

Whilst we can only speculate, surely His Majesty is far too busy to lead discussions on how to compensate his staff. What’s far more likely is a handful of senior figures have costed this move themselves, decided that a maximum of £600 per employee is a fair deal and passed the burden of the public backlash onto the King.

But stately palaces, golden carriages and diamond-encrusted crowns make it impossible for the King to deny he is vastly wealthy and, resultantly, his ability to pay staff more than the current amount they are in line to receive.

Put simply, if workers at the likes of Rolls-Royce feel that £2,000 doesn’t come anywhere close to the level of support they need to survive the cost-of-living crisis, what benefit could the Monarch’s employees hope to see from £600, particularly when they will be living in or around London and battling what was already a high cost of living?

A cash bonus is certainly better than nothing, but coupling it with other solutions such as those listed above is the best approach to improve financial wellbeing and, subsequently, the morale and productivity of the workforce.



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Comments (2)

  • Garry
    Garry
    Tue, 15 Nov 2022 1:10pm GMT
    I agree that £600 is small compared to other companies, however, why does it have to be denigrated and criticised? Do we have all the facts and know what other support is in place or is planned?

    It's a click-bait headline.
  • martin
    martin
    Tue, 15 Nov 2022 12:13pm GMT
    Owning the multi billion $$ dutchies of Lancaster and Cornwall, I'm sure Charly can find a few spare pennies to pay his workers properly, from the jobs advertized, he isn't paying them a London wage anyway

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