With Britain's jobless rate at its lowest since 1974 the Bank of England is watching pay settlements closely as it mulls further rises in interest rates.
M&S said that from 1 October more than 40,000 workers will see their hourly pay increase to a minimum of £10.20 (€11.70).
The additional autumn pay review, a first for M&S, follows an initial pay increase in April to £10.00 an hour from £9.50 pounds.
Combined, this represents an annual raise of 7.4%. However, UK inflation was 9.9% in August.
The clothing and food retailer said its new package to support workers would cost it £15 million (€17.1 million).
It includes a one-off £250 M&S voucher for 4,500 salaried colleagues at pre-management levels in stores and support centres. Other staff benefits include free food and sanitary products.
Last week Sainsbury's, Britain's second largest grocer, raised staff pay for the first time outside of its annual pay review, while the John Lewis Partnership said it would pay a one-off cost of living support payment of £500 (€572) for full-time employees.
Retailers, including market leader Tesco, are also stepping up perks for workers.
The chief executive of Marks & Spencer, Stuart Machin, commented, “Whether you’re running a home or running a business, everyone across the country is feeling the pressure of rising costs. We want to do what we can to help ease some of that strain; that's why we have invested in price to deliver better value for our customers and, why we are investing in our colleague base pay for the second time this year.
"Our colleagues are our biggest asset, and we want to ensure they are fully supported and rewarded for the remarkable contribution they make to M&S.”