DON'T LEAVE YOUR PENSION IN A STATE.
Money used to fund the State pension, which comes from National Insurance contributions, is fast running out.
And today's workers will feel the pinch whatever changes are made.
The basic State pension is pounds 61.15 a week, but by 2021 it will be worth just EIGHT per cent of the national average wage.
So there's no time like the present to take out your own pension plan or boost your contributions.
If you can, join your work scheme. Most companies will contribute to your retirement.
If you take out a personal pension make sure you take specialist independent advice. Research by consumer magazine Which? found that many personal pensions are a rip-off - inflexible, too expensive and complex. So check the charges and ask what penalties, if any, there will be if you need to stop contributing because of redundancy, or want to retire earlier than planned.
Some of the worst unit-linked pensions surveyed include Barclays Life, Save & Prosper and Scottish Equitable. Best buys include Colonial Direct, Equitable Life and Gartmore. Of the with-profits pension plans, it recommends Equitable Life, Friends Provident and National Mutual. But NPI, Prudential and Scottish Life are named as worst buys.
Eagle Star Direct recently triggered a pensions price war by offering what it claims is the cheapest pension in Britain, with a two-year money back guarantee. If you've already retired and are struggling to survive, but own your home, you could consider a home income plan.
There are two main types. With one scheme you mortgage part of your home then buy a fixed-rate annuity from an insurance company.
To qualify you have to be over 70 and the maximum you can borrow is pounds 30,000. With the other you sell all or part of your home to an insurance firm and live in it as a tenant. The insurer then pays you either a lump sum or sells you an annuity.
For details of safe home income plans write to SHIP (Safe Home Income Plans) 374-378 Ewell Road, Surbiton, Surrey KT6 7BB. Another specialist is Hinton & Wild (0181 390 8166). Age Concern also offers advice on home income plans (0181 679 8000).
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