Lidl is handing out a 2.4% pay rise to its lowest-paid staff to put them on the new independently verified living wage.

The discounter said 5,500 employees – a quarter of its UK workforce – would benefit from the pay rise which puts them on a minimum of £8.45 an hour, or £9.75 an hour in London. The workers in England, Scotland and Wales will get the pay rise from 1 March next year, making them some of the best paid retail staff, although they do not receive paid breaks or extra pay for Sundays.

Lidl first lifted its minimum pay last autumn to the level recommended by the Living Wage Foundation, which campaigns for companies to pay staff enough to meet the cost of living. Last month, the LWF lifted its recommendation for the voluntary rate from £8.25 to £8.45 outside London and from £9.40 to £9.75 in the capital. Now Lidl has followed suit putting its staff on pay rates well above the legal minimum for over-25s of £7.20 an hour which is set to rise to £7.50 in March.

Lidl said that offering the living wage rate had led to a 20% increase in job applications over the last 12 months. The company is now aiming to recruit over 630 people for permanent positions before Christmas.

Nan Gibson, Lidl UK HR board director said: “We recognise the contribution of each and every colleague within the business and we feel it’s important to celebrate our achievements together. So it fills me with pride that our colleagues are among the best paid in the supermarket sector.”

See more at: The Guardian