The pensions scheme assets will be boosted with property

The scheme will remain open to existing members but they will have to make contributions from their salaries or get lower benefits on retirement.

At the same time, the pension scheme assets will be boosted through M&S's property portfolio.

M&S is the latest in a long line of firms to reform its pension scheme in an attempt to close a black hole.

Trade-off

The M&S pension scheme has long been seen as a gold standard.

Up until now, M&S staff earned the right to one-45th of their final salary in the form of retirement income for each year of service.

There is no do nothing option here, we have �704m deficit and it has to be funded Marks & Spencer spokeswoman

Workers have not had to make any contributions from their salaries.

However, this is now set to change.

M&S pension scheme members will have to choose one of the three following options:

• Start making pension contributions from their salary; contributions will rise to 7% over the next three years
• Do not make contributions but as a result accrue benefits at a slower rate
• Do not make contributions but agree to a limit on the rate at which their pensionable salaries rise.

An M&S spokeswoman told BBC News that it had to act to close its pension scheme's deficit.

"There is no do nothing option here, we have �704m deficit and it has to be funded.

"We have to strike the right balance between a healthy company and a healthy pension fund," the spokeswoman added.

High costs

At present, there are 123,000 members in the M&S pension scheme, and 26,000 of these are current staff.

Like many big UK companies, M&S has already closed its final salary scheme to new joiners.

The reason for the widespread closure of schemes to new joiners is the high cost of guaranteeing worker pensions, due in large part to rising life expectancy.

Some firms have gone far further than M&S and closed their schemes to existing members as well as new joiners.