Starbucks announced that it will be raising the minimum wage for its employees in the UK to 7.20 pounds ($10.92) an hour in April 2016.
The coffee chain giant also said that it will be offering interest-free loans to employees to help them move into a new home to pay rental deposits.
The maximum amount will be the same as one month’s wages, to be repaid over 12 months.
The loan scheme is being introduced after Starbucks polled employees on their biggest issues.
Housing was the top issue for employees. Kris Engskov, the president of Starbucks in Europe, the Middle East and Africa, told the FT: “That is no surprise. People are working in cities and not being able to afford housing close to where they work.”
Starbucks will be paying all its workers in the UK the National Living Wage, which includes apprentices and over 4,500 people under the age of 25.
The current minimum wage in the UK for those ages over 21 is 6.50 pounds an hour and will increase to 6.70 pounds in October.
Over half of Starbucks’ 7,000 employees in Britain are under the age of 25.
When the compulsory minimum wage goes into effect in April the average hourly rate for workers will be 7.98 pounds.
The announcement comes following a similar announcement last week made by Lidl – the German discount retailer. Lidl said that it would increase the pay for thousands of its employees in the UK by at least 12 percent.