Starbucks has launched a loan program to help its U.K. staff put down a deposit on a rental property.
Workers who’ve been at Starbucks for at least one year can apply for an interest-free loan equivalent to one month’s wages, to use as a deposit on a house, the coffee giant’s U.K. branch announced on Thursday.
It’s an effort to help employees struggling with the high cost of living in the U.K. and comes at a time when chains that employ large numbers of low-paid workers have come under criticism.
Starbucks’ EMEA President Kris Engskov told CNBC that it was part of a corporate bid to attract good workers and ensure that staff could afford to live in the areas where Starbucks operates.
“We want our partners to be able to live as close to work as possible. It’s an issue with our proximity to cities and one of the problems with having much of our business in areas like Central London where it’s too expensive to live in the city center,” he said.
Starbucks will roll out the loan scheme alongside a minimum wage increases to £7.20 ( $10.96) per hour, which will meet the country’s voluntary living wage guidelines. London workers will be paid an additional premium.
The loans will be doled out four weeks after workers apply and will be paid back over the following 12 months through wage deductions. The program is being launched with help from British housing and homelessness charity Shelter and Starbucks expects to be handing out the first batch of loans within three months.
The average deposit for a U.K. rental properties reached £1,226 ($1,862) in 2014, according to Mydeposits, which provides deposit government-backed protection schemes. The U.K.’s Royal Institute of Chartered Surveyors forecast in September that rents would increase in the near term, with housing prices seen rising 6 percent across 2015.
Starbucks’ new deposit program is a result of more than a year of staff consultations, where housing and education were identified as some of the biggest financial challenges facing employees. After speaking with some non-governmental organizations, the coffee giant decided to directly adopt the loan model offered by Shelter to its own employees.
A total sum hasn’t been set aside for the loan deposit scheme and Engskov stressed it was a “definitive” program without a set shelf life. He added that it was the only loan program of its kind across the company, which currently operates 22,519 stores across 65 countries, but it may not be the last.
“This is a U.K. first, and frankly a global first for us in terms of addressing rent and housing — and I’m sure other markets are watching,” he said.
Earlier this year, Starbucks started to roll out full four-year college tuition for qualifying U.S. staff and Enskov told CNBC that the U.K. business could adopt a similar scheme as part of its apprenticeship expansion.
Between 2011 and 2014, Starbucks partnered with a U.S. community financing group to offer small business loans aimed at putting people back to work. According to the website of “Create Jobs for USA,” the program offered $105 million in financing that helped create and protect 5,000 jobs.