M&S scraps 'too costly' pensions

STORES giant Marks & Spencer, one of Britain's most patriarchal employers, has ditched its final-salary pension scheme for new staff. Any employees joining the company after 1 April will be offered a defined-contribution scheme, almost certain to provide an inferior pension.

Under the current scheme, 60,000 workers are guaranteed a pension based on their salary and length of service.

The new scheme makes no promises. Staff will be able to contribute between 3% and 6% of their salary and M&S will double their contribution. The decision is likely to save the firm hundreds of millions of pounds and comes as other leading companies axe their expensive final-salary schemes.

M&S head of pensions John Peachey said: 'Our scheme is costing us 22% of our total salary bill. That meant £120m last year. The business cannot support that level of contribution.'