Lidl is increasing pay rates for its lowest paid workers to match the new Living Wage Foundation benchmark.

The discounter will pay all of its employees at least £8.45 per hour across England, Scotland and Wales, while staff working in London will receive £9.75 per hour.

Lidl said the pay hikes, which go beyond the new national living wage of £7.50 per hour unveiled by Chancellor Philip Hammond yesterday, reaffirm its “commitment to investing in its employees”.

About 5,500 workers – around a quarter of Lidl’s workforce in the UK – will benefit from the changes in pay when they come into force from March 1 next year.

Last year, Lidl became the first UK supermarket chain to adopt the ‘real living wage’, set by the Living Wage Foundation, paying staff £8.25 per hour and £9.40 inside the M25.

It sparked a 20% uplift in job applications to the discounter over the past 12 months.

Lidl is aiming to boost its workforce by 630 people ahead of Christmas.

The grocer’s boss Christian Härtnagel, who took the reins from Ronny Gottschlich earlier this year, said: “This announcement comes at a time when our business is going from strength to strength and our market share has reached a record high of 4.6%.

“It is one of many commitments that we will be making to our colleagues in the near future.”

Living Wage Foundation director Katherine Chapman said: “Lidl’s commitment to pay their staff the new real living wage rates is fantastic news and an acknowledgment of what we have always believed and advocated - that it is possible to pay the real living wage if you are a supermarket in the UK.”

Lidl is not currently an accredited Living Wage Foundation employer, as it doesn’t guarantee that all sub-contracted staff, including cleaners, are also paid the ‘real living wage.’

The likes of Ikea, Oliver Bonas, Majestic Wine and Burberry are all accredited by the foundation.

Lidl’s investment in higher wages for its permanent staff comes a year after it unveiled plans to plough £1.5bn into expanding its store and logistics network across the UK as it eyes 1,500 stores in Britain.

Earlier this month, the discounter opened its 10th warehouse in the UK at a cost of £55m.