The retailer has committed to paying all staff at least £7.85 an hour, and a minimum of £9.15 an hour in London.
The pay increase is expected to impact 50% of Ikea UK’s 9,000 employees.
Ikea’s living wage pledge is part of a wider initiative to ensure that staff receive the right level of pay, as well as a schedule and contract that works for them, the organisation and customers.
The living wage is the rate of pay calculated by the Living Wage Foundation to cover the basic cost of living in the UK. It is distinct from the national living wage of £7.20 an hour announced by Chancellor George Osborne in the 2015 summer Budget.
“Ikea’s commitment to pay all employees the living wage is a significant step for the retail industry so soon after the chancellor’s Budget, and sets a benchmark for retailers seeking to be socially responsible.
“This commitment reinforces the retailer’s credentials as an ethical employer.
“With some commentators questioning the affordability of the living wage for employers, Ikea’s move will no doubt be scrutinised carefully by other retailers.
“Far from being punitive, this first mover advantage is much more likely to pay dividends for the Ikea brand, supporting staff recruitment, retention and building good will.”
Melanie Stancliffe, employment specialist and partner at Thomas Eggar