More than 100 companies offer a plan. Which one is right for me?

Personal pensions

If you are self-employed or your employer does not offer a company pension scheme, investing in your own personal pension is the most tax- efficient way to save for your retirement.

You need to choose a pension provider with good, consistent performance and reasonable policy charges to get the most out of your money. You should also look for a plan which is flexible enough to fit in with changes in your lifestyle - one that allows you to alter the size of your premiums, to stop and start payments and to retire at any age without penalty.

But how do you go about selecting the right one? With more than 100 insurance and investment companies offering their own ranges of pension products, the choice may seem endless.

If you decide to aim for a pension income worth half your salary at the age of, say, 55, a competent pensions adviser should be able to calculate how much you should save to attain that level of income. But Nick Bamford of the independent financial adviser Informed Choice, warns: "Then the client has to decide how much they can actually afford. The later you leave saving towards your pension, the more expensive it will be to provide a reasonable income.

There is a good argument for everyone to make single premium pension contributions. Not only are the charges generally lower, but single premiums are not subject to the hefty penalties for stopping further payments. This makes them particularly suitable for women who think they may want to take a career break to have children, or people who want time off work to travel or study.

It may be advisable to ask for a "waiver of premium" benefit to pay contributions during a long period of illness.

A competent adviser should be able to guide you through past performance tables and the different charging structures. Martin Beckett of the independent adviser Pointon York, says: "If the client has 10 years or less to go to retirement, they are probably likely to be more cautious and might look at a with-profits fund.

"You want a company with the ability to maintain bonuses. Equitable Life has an undeniably good with-profits record. Commercial Union is a very strong office and Standard Life is another good all-round company we would consider."

Those who have more than 10 years to go before retirement should consider what is called a unit-linked fund, which gives returns directly linked to the stock market.

Mr Beckett says: "The criteria here would be good consistent performance and a fair charging structure. One of my favourites for the more agressive and adventurous type of investor is Skandia Life."

The charging structure of pension policies varies enormously from company to company and depending on the type of policy you choose. Despite the introduction of disclosure rules at the beginning of the year, many charges remain hidden.

However, when you buy a plan you are given projections of the effect of its charges. Total charges can seem high - as much as a third of the total pension savings you might accumulate over a 25 year period and typically a fifth over this timeframe.

Look for an independent financial adviser who offers the choice of either being paid by a fee by you or of receiving commission from the company whose products he sells.

The commission on a one-off payment of, for example, pounds 2,000 would typically be 5 per cent or pounds 100. But a fee for the same advice could cost you pounds 300 to pounds 400.