One in four of the UK's biggest companies no longer offer staff access to a pension where your retirement income is based on your final salary.

Around 25% of FTSE 100 companies now offer only a defined contribution scheme, where you contribute to a pot of cash that you can then turn into an income once you reach 55 (see the State Pension and Pension guides).

Many have closed their defined benefit schemes, more commonly referred to as final salary schemes, to both new and existing members, according to consultants Towers Watson.

The figure is considerably higher than the 15% of blue chip companies that had completely closed their defined benefit pensions when the same research was carried out last year.

The study also found 90% of companies offer a defined contribution pension to new staff, with just 1% still offering a final salary scheme.

Defined benefit schemes, under which employers guarantee how much a pension will be worth on retirement based on a member's salary and the number of years they have belonged to the scheme, have become increasingly expensive to offer in recent years due to rising life expectancy and volatile investment returns.

Under defined contribution plans, the individual shoulders the risk, with some companies making set contributions to their workers' pot, in addition to paying a salary.

Paul Macro, from Towers Watson, says: "Defined contribution pensions continue to dominate the retirement savings landscape.

"This is a trend we expect to see continue in the next couple of years as more firms close defined benefit schemes to future accrual and frequently replace defined benefit with defined contribution."

Recent research carried out by the National Association of Pension Funds found final salary pension schemes closed their doors to existing members at a record rate during 2010.

The group said 17% of companies had closed final salary schemes to existing, as well as new, members during the year, up from 7% in 2009 and 3% in 2008.

Further reading/Key links

Boost pension: State Pension
Pension MoneySaving: Pensions