If you’re looking to start saving for retirement, see if your employer offers a pension scheme you can join. Employers usually pick up most of the cost and there are often other benefits, such as life insurance, included. It’s often worth joining simply to get the benefit of your employer’s contribution to your pot, as these are free from tax or national insurance contributions.

Employer salary related schemes, often referred to as defined benefit or final salary schemes, are pensions based on length of service and salary and are increasingly rare. The schemes can be contributory, where the employee also pays towards the cost, or non-contributory, where the employer bears all the burden of paying into the pension. Final salary schemes offer some security to employees, as the level of their pensions is guaranteed to the extent that the employer maintains the schemes’ funding. Your benefits are not affected by stock market fluctuations, however there is no guarantee that the Employer will always be able to maintain contributions.

Employer money purchase schemes are also available to employees. Instead of the employer promising an eventual level of pension, they simply offer to make a level of contribution to the scheme on your behalf. The level of pension you eventually get will depend upon how much you pay into the fund, how much your employer pays in, and how well your invested contributions grow.

If there is no employer scheme open to you, you should consider a stakeholder or personal pension.