Retail giant Ikea stumps up £35 million+ to support financial wellbeing of its UK co-workers

Ikea is investing over £35 million in the financial wellbeing of its co-workers across the UK through a combination of pay increases that it says reflect the true cost-of-living, as well as year end bonuses based on the retailer’s FY23 performance.  

In line with its commitment to offer a fair and sustainable rate of pay, hourly paid co-workers will receive a 10% increase in 2024, with salaried co-workers receiving a rise of 5% on average; together representing an investment of almost £10 million.  

Through the One Ikea Bonus programme, eligible co-workers across the UK will receive a year end bonus of at least a month’s pay in time for Christmas.

The £25.6 million bonus pot recognises co-workers' important contribution to Ikea’s strong business performance in FY23, despite challenging market conditions.

As the largest accredited Living Wage Foundation retailer, Ikea has pledged to meet the new Real Living Wage (RLW) - a voluntary rate paid by employers who choose to go beyond the government recommended National Living Wage (NLW).

To that end, hourly paid co-workers in London will receive the new rate of £13.15, and £12.00 for employees throughout the rest of the UK.

Last year, the retailer also introduced an ‘outer London’ rate for over 1,300 co-workers based in its Lakeside, Reading and Milton Keynes stores, which will increase from £11.45 per hour to £12.60 in 2024, exceeding Living Wage Foundation rates in these regions.  

Once fully implemented, full-time Ikea co-workers outside of London are set to earn £1,136 a year more than those on the Government's new National Living Wage (NLW), while those in the new outer London range (Lakeside, Reading and Milton Keynes) will earn £2,352 more and co-workers in London on the region-specific RLW will receive £3,468 more a year.

This announcement follows a £12 million investment in January 2023 that included an on average 6% pay increase and an enhanced benefits package to support employees during the cost-of-living crisis.

Darren Taylor, Country People & Culture Manager, Ikea UK & Ireland, says: “We’ve always been committed to caring for our co-workers, particularly during challenging times, which is why we’re announcing further investment to enhance their financial stability and security. Although we see inflation starting to ease, the cost-of-living continues to have a very real impact.”

“We recognise that when our co-workers grow, so does Ikea, and our aim is to ensure that co-workers feel supported and valued through a variety of benefits that contribute to their financial, mental and physical wellbeing; supporting our vision to create a better everyday life for the many people.”  

Ikea also rewards co-workers through its loyalty scheme, TACK (meaning ‘thank you’ in Swedish), which provides employees with extra payments to their pension funds after five years with the company.