Pension Fund Update

Marks & Spencer Group PLC
12 July 2004



Issued: Saturday, 10 July 2004

                Marks and Spencer Group plc ('Marks & Spencer')
                              Pension Fund Update

Marks and Spencer Group plc has asked the Trustees of the Marks & Spencer
Pension Scheme about the possible impact on the pension fund of a deterioration
in the creditworthiness of the employer group.

The Trustees have today responded by providing information in relation to the
possible implications of such a deterioration on the investment policy of the
fund. The Trustees have stated that they would be concerned as to any material
weakening of the Company's covenant and have said that, in such circumstances,
they would be bound to consider the adoption of a more conservative investment
strategy, involving a significant shift into bonds.

The table below is an extract from information provided by the Trustees showing
the potential impact of moving equities into bonds to lower the investment risk
in the pension fund. The Trustees have stated that if they were to decide to
change the investment strategy, they would seek to agree with the Company any
consequent change in funding arrangements so that the actual funding patterns
would not necessarily be the same as those shown below.


                                                                                                             
Asset                 40% bonds   60% bonds   70% bonds   80% bonds         100%
allocation         60% equities         40%         30%         20%        gilts                                        
                          (2003    equities    equities    equities
                     valuation)

Past service
deficit (after
£400m lump sum)           £185m       £550m       £850m     £1,050m      £1,800m

On going
contribution                                                              
rate                      15.8%         18%         20%         22%          28%

Annual ongoing
contributions
based on £500m
payroll                    £80m        £90m       £100m       £110m        £140m

Deficit spread         12 years     8 years     5 years      5 or 3      3 years
over                                                          years

Estimated total
annual Company
contributions             £105m       £180m       £290m    £350m or        £785m
                  (see note 1)                                £490m                                          
                  

(1)To be consistent with the rest of the table, the figure of £105m has
been calculated assuming that the deficit of £185m is spread over 12 years. The
actual current funding plan agreed between the Company and the Trustees was for
an initial payment of £400m, together with 9 payments of £33m a year from 2007
to 2015 to fund the remaining £185m deficit, in addition to the regular annual
contribution of £80m.

PRESS ENQUIRIES

Marks & Spencer         020 7268 1919
Corporate Press Office

Tulchan                 020 7353 4200
Andrew Grant
Kirstie Hamilton
Katie Macdonald-Smith


The directors of Marks and Spencer Group plc accept responsibility for the
information contained in this announcement and confirm that, to the best of
their knowledge and belief, (having taken all reasonable care to ensure that
such is the case), the information contained in this announcement is in
accordance with the facts and does not omit anything likely to affect the import
of such information.

                                    



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