Retailer Marks & Spencer has become the latest company to close its final salary pension scheme to new staff.

The group announced following a 12-month review of the scheme, staff who joined the company after April 1 would no longer be able to enrol in its non-contributory pension.

Instead, after they had been with the company for a qualifying period of one year, they would be able to join a defined contribution scheme, in which M&S will only guarantee the size of contributions it makes and not the value of the pension on retirement.

The retailer, which paid £120 million into its pension scheme last year, said it had decided on the move in a bid to cut costs and bring it in line with other large retailers and FTSE-100 companies.

It follows moves by a number of groups, including British Telecom, Abbey National and Iceland, to close final salary schemes to new staff.

Accountancy group Ernst and Young has gone one step further and closed its final salary scheme to new contributions from existing members.

Under the new scheme, M&S employees will contribute between three per cent and six per cent of their pay and M&S will add double the member's contribution.

The amount the retailer contributes to the new scheme is well down on the 22 per cent it pays into the final salary pension.

Staff will also be responsible for deciding how the money is invested and can choose from a range of managed investment funds.

John Peachy, head of group pensions, said: "The new scheme is more appropriate for today's business environment and will allow employees, with the support of the company, to take ownership of their final pension."