Unilever is the latest firm to shut its pension scheme to new joiners

The company says it wants to do this to give it "greater certainty" about the cost of its future pension provision.

At the moment 7,000 staff are in the scheme, paying 5% of their salaries in contributions each year.

A less generous scheme will be introduced for new joiners later this year, after consultation with the scheme's trustees and staff.

The decision means that Unilever will join the nearly two-thirds of UK final salary pension schemes which have already been closed to new members.

New recruits

New joiners at Unilever will be offered a hybrid scheme to join, in which their pension will be related partly to their average salary during their service with the company, for earnings up to �35,000 a year.

For earnings above that level, they will have a "money purchase" personal pension pot.

Unilever said its decision was not related to the deficit in its current scheme, as it has already put in place plans to eradicate this over eight years, including the payment by the company of an additional �510m in contributions.

Members of the current scheme have been told that they will need to pay higher contributions each year, up from 5% to 7%, from the start of 2008.

For pensions earned after 1 January 2008, inflation protection will be limited to just 2.5% a year, in line with the minimum required by law.

New scheme

If existing members want to avoid the higher contributions they can opt to join the new scheme instead.

Like the new joiners, they will be charged 5% of their salaries each year for the "career average" element, on earnings up to �35,000 a year.

For any earnings above that, they and the new recruits will not have to make any contributions at all.

The company will pay the equivalent of 12.5% of those earnings into the members' "money purchase" part of the new scheme, or alternatively the members can simply opt to take those company contributions as cash.

Unilever's UK pension scheme currently has 40,000 pensioners and 40,000 deferred members - former staff members who have not yet retired.

The company said the pensioners and deferred members would not be affected by the proposed changes.