Barclays cuts back on staff perks

BARCLAYS BANK yesterday cut back on some cheap loans to staff, part of a long-standing move among the clearing banks to reduce the cost of fringe benefits.

The loans are for holiday and retirement homes, cars and school fees. The move reflects widespread cost-cutting at a time when the banks' profits are under pressure and staff budgets are being pruned.

The change was attacked yesterday by the Banking Insurance and Finance Union. The union said that special housing allowances were also to be dropped, which would have a 'severe impact' on staff in London.

Barclays said the concession was being withdrawn because the house price fall in London had reduced the burden compared with other areas of the country.

Concessions on staff purchases of foreign exchange are also being reduced and there are changes in the conditions for staff mortages.

'These penny-pinching moves are bringing a lot of discomfort to staff,' Rob MacGregor, BIFU national officer for Barclays, said. 'It signals to me that the bank has given up on the question of morale.'

The bank said that after a comprehensive review it was replacing four specialised staff loans with two simplified packages based on what ordinary customers could get, but with discounted interest rates. It said it was the last among the big four to drop specialist loans.

Loans in the four categories are at present available at 6 percentage points under base rate, with a minimum rate of 5 per cent.

Interest rates on the new loans will be considerably higher even at the new discounted rate. Staff will be eligible for homeowner loans at a concessional rate equivalent to the Barclays mortgage rate and other loans at a concessionary rate of almost 14 per cent.

Barclays said it would keep cheap mortgages for staff, which are available at a 5 per cent discount.