Ikea to pay staff more than living wage

Ikea will next year begin paying its staff in Britain a living wage above the compulsory level set out by the government this month, the world’s largest furniture retailer said.

In his first post-election budget, British finance minister, George Osborne, announced a compulsory living wage for workers aged over 25, starting at £7.20 an hour when it is introduced next April, and rising to £9.35 by 2020.

Ikea, the privately owned Swedish company known for its flat-pack, self-assembly furniture, said it would, instead, pay all of its UK workers the level set out annually by The Living Wage Foundation. It will be the first national retailer to do so.

All of its UK staff, including those under 25, will be paid a minimum of £7.85 an hour from April, 2016, with those in London paid at least £9.15 an hour. Ikea said this would impact more than 50% of its 9,000 workers.

“This is a huge step for the British retail sector and we hope that many other businesses will follow the leadership Ikea is showing on the issue of basic pay,” Rhys Moore, director of The Living Wage Foundation, said.

He added: “The experience of the campaign throughout has been that you need a first mover in every sector. This opens up some fruitful conversations with others who have said this is impossible in retail and it can’t be done. It can.”

Ikea is the UK’s biggest furniture retailer, with 18 stores, and plans to open more in Sheffield, Reading, Exeter, and Greenwich, in south-east London.