Chartered Accountants of Poynton, Cheshire

The basic state pension for a married couple is just over £6,800 per annum, which means that you will almost certainly need additional sources of income.

For most people, saving to provide for a comfortable and financially secure retirement includes tax efficient investment in an appropriate form of company pension scheme or private pension policy.

Your personal planning will be determined by a number of factors, including:

• Whether there is a company pension scheme
• Whether you are self-employed
• Your age
• How much you are able to invest for your retirement

Company pensions

This may take the form of a final salary scheme, which pays a retirement income related to the amount earned when you stopped working; or a money purchase scheme, which reflects the amount invested and the underlying investment performance.

Private Pensions

If you are not in a company scheme, you should make your own arrangements, since relying on the state pension is already unwise, and is likely to become increasingly so with every passing year.

Personal Pensions

Investment in personal pensions is limited to a percentage of earnings, up to £105,600.

Stakeholder pensions

These are subject to a minimum £20 investment, and a 1% per annum ceiling on charges. Premiums can be paid on behalf of another person - including, say, an infant grandchild.

SIPPs

Self Invested Personal Pension policies give the investor greater flexibility over how the funds are invested.

Retirement annuities

These are available only where a policy currently exists. Premiums paid under retirement annuity policies are not subject to a cap on earnings, although the maximum percentage is lower.

Please Note: New rules, effective from April 2006, may create more opportunity for higher earners to maximise tax-advantaged pension savings. We would also recommend that you consider a parallel savings strategy to build readily-accessible savings outside your 'pension pot'.