Starbucks is to pay all staff, including those aged under 25, the living wage and will offer employees interest-free loans for rent deposits.

Starbucks will pay all staff the living wage, including those aged under 25

The coffee chain revealed its decision on the living wage, which goes beyond the requirements set out by Chancellor George Osborne in the Budget, as John Lewis boss Andy Street warned about the potential cost.

The new national minimum wage of £7.20 per hour for those aged 25 and above comes into force next April.

While some retailers are concerned at the likely cost impact, others have decided to extend or exceed the terms set out by Osborne.

Lidl, for instance, will pay employees at least £8.20 an hour from next month. The rate exceeds that lobbied for by campaign group the Living Wage Foundation.

Sainsbury’s has already increased the pay of its store staff, including those aged under 25, to £7.36 an hour.

Starbucks EMEA president Kris Engskov said the provision of the living wage to all staff, and the interest-free rental deposit scheme, would help employees cope with the cost of living.

He said: “We know the cost of living is a key concern for many with the average rental deposit in England now £1,226 and, with over half of our partners being under 25 years old, that rent affordability especially is an issue that affects them. These initiatives are two of the ways we are able to support the great people that work with us.”

However John Lewis managing director Andy Street told The Guardian newspaper that his business might have to modify staff benefits because of the introduction of the living wage.