Northern Rock staff receive generous bonuses
January 14, 2008
As talks about the future of the stricken bank Northern Rock continue staff members have been awarded a pay rise, as well as one off and Christmas bonuses over the past couple of weeks. According to reports around six thousand members of staff, excluding managers, were granted a bonus of 2% of their salary, along with a one off £200 Christmas bonus and a pay rise of 4%. The pay rise is set to take effect from this month.
The pay rise of 4% was agreed following discussions with union officials. The bonuses and one off Christmas payments were said to be a reward for staff members for sticking with the bank through what was described as a very difficult period, and for displaying ‘great loyalty’ during this difficult period. Uncertainty over the bank’s future has been rife over recent months, after the Rock became the first victim of a run on a British bank in over 150 years.
News that Northern Rock had taken an emergency loan of billions of pounds from the Bank of England became public knowledge in September of last year, and once the news became widely known chaos ensued for the bank. Many of its 1.5 million savers were concerned that the bank was on the verge of collapse, and in the space of a few days over £2 billion worth of savings was withdrawn from the bank by worried savers. Share prices also plummeted, and the bank is now in talks to discuss a takeover.
As a result of the Northern Rock crisis, a number of changes have taken place. The government’s guarantee on consumer savings has been raised, as has awareness over this guarantee. The chancellor is also set to give greater powers to the Financial Services Authority to take action in cases such as these to avoid a similar situation arising with another bank in the future.
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