Retail giant Tesco is to make changes to its pension scheme, which could see staff receive smaller payouts than under the current arrangements.

Under the changes, full pension benefits will not be paid until 67, two years later than at present, while the way inflation is taken into account will be changed.

A spokesperson for Tesco defended the move and said the group was retaining the defined pension scheme when similar schemes had been closed at other companies.

"We are retaining the defined benefit pension scheme when most companies have closed theirs. Only three other FTSE 100 companies still have one," the spokesperson said.

The changes were needed, the spokesperson insisted, to ensure Tesco's scheme was "sustainable".

The spokesperson said: "Because people are living much longer pensions cost much more to provide. Our staff can still retire at 65; indeed they can still retire any time after 55. These changes don't require colleagues to work any longer, do not require colleagues to pay more and will not affect the pension that staff have already built up."

However, Tesco said pensions built up after June "may be less" than before, depending on when employees choose to retire. "They can of course choose to work a little longer to get an even better pension. It follows that the vast majority of staff will not have to work anything like two years more to get the pension which we were previously forecasting," the spokesperson said.

Pauline Foulkes, national officer at the Usdaw union, which represents, 165,000 Tesco workers, said it would "consider" the proposed changes in more detail over the next few weeks.

However, Foulkes added: "We welcome Tesco's clear commitment to maintain its defined benefit schemes, which remains the best way for our members to save for their retirement."