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Company schemes are always firm favourites.

THE best way to save for retirement is generally to join your firm's pension scheme.

This is because many employers will also contribute to your fund. In the past, companies tended to offer what are known as defined benefit, or final salary, schemes.

These paid a pension based on the number of years you were in the scheme and your salary at retirement. With some, you got one sixtieth of your salary for every year.

But these schemes are very expensive to run and few remain open to new members.

Now, most firms run defined contribution, or money purchase, schemes. You pay in a percentage of your pay and the pension you get depends on what your fund is worth when you retire. This is down to the performance of the stocks and shares it is invested in.

All firms with five or more staff, that don't have a final salary or money purchase scheme, are legally obliged to offer access to a stakeholder plan. This is a flexible, low-cost form of money purchase scheme.

If your employer is too small to provide this, or you are not working, you can still start a pension and get tax relief on the payments. An independent financial adviser will help you choose and set up a personal plan. To find advisers in your area, log on to

Check on how it is performing and make changes to the way it is invested if it isn't doing well.
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Title Annotation:Business
Publication:Daily Record (Glasgow, Scotland)
Date:Sep 23, 2010
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