Supermarket giant Morrisons has announced a new pay deal which it says will guarantee at least £10 an hour for all staff.

The retailer, which employs around 120,000 people across the UK, said it will be the first UK supermarket group to secure workers a £10 minimum rate when the pay deal starts in April.

The new payment policy will result in a “significant” pay increase for nearly 96,000 staff members, Morrisons said.

Most workers who move up to the new minimum hourly rate, which is subject to a ballot vote on January 27, will receive a 9% rise in their pay.

Currently, Morrisons has a minimum hourly pay rate of £9.20 per hour.

It said the increase in hourly pay will be primarily funded by investment into payroll, but around a quarter of the increase will be funded by changes to its bonus pay-outs.

Staff told the company they would prefer to have a guaranteed amount in their hourly rate and receive it more regularly instead of the current bonus scheme, it said.

David Potts, chief executive officer at Morrisons, said: “It’s great to be able to say that in the UK from April this year, if you work at Morrisons supermarkets, you will earn at least £10 an hour.

“It’s a symbolic and important milestone that represents another step in rewarding the incredibly important work that our colleagues do up and down the country.

“Over the last year we have seen renewed and widespread appreciation in the UK for our colleagues who have had an incredibly tough 2020, working tirelessly so Britain could eat well and shop safely throughout the pandemic.

“Morrisons colleagues have earned their status as key workers, and this pay increase, many times over.”

Joanne McGuinness, Usdaw national officer, said: “The new consolidated hourly rate is now the leading rate of the major supermarkets, which is paid every hour and removes the uncertainty of a bonus payment.

“It is a big step forward, shows that Morrisons is prepared to invest in the staff to help grow the business and I hope that the deal is supported by our members in the ballot.

“It’s been a tough time for food retail staff who have worked throughout the pandemic in difficult circumstances.”

The retailer said there will also be a London weighting in addition, with rates for inner London rising by 85p and outer London by 60p per hour.