Only one employee in 10 makes any voluntary top-up to his or

Only one employee in 10 makes any voluntary top-up to his or her company pension. Given that your retirement income is likely to be much less than your income at work, this is an unwelcome reversal.You can see how large obstacles such as these loom in the lives of most of us when you realise that fewer than one employee in a hundred expects to retire on the maximum pension allowable by the Inland Revenue (two- thirds of your final salary up to a salary limit of pounds 78,600). You just never know when you will need early access to some of your capital.For some people another obstacle is that although you receive tax relief on the way in, your pension is taxed on the way out - when, that is, you start to draw it. But this Government carrot has a stick to match: its tax generosity is accompanied by a requirement to lock up your pension money for years and years, irrespective of what might happen in your life in the intervening period.While it is perhaps prudent to have a proportion of your investment locked away - removing the temptation to spend too much too soon - losing control of the whole lot can be a serious deterrent to investment planning for retirement. Each pounds 100 invested costs you only pounds 75 (pounds 60 if you are a high rate taxpayer). Once you discover that this percentage varies with your age you can be forgiven for deciding, like millions of other people do, that of course you will invest the right amount in your pension - but not just yet, not in fact until it is too late and your retirement income is more or less doomed to be less than you need.The Government gives generous tax relief on pension contributions.

If you buy a pension, you run the gauntlet of bewildering sets of initials and concepts - is it better to have a company or a personal pension? How about an AVC, a FSAVC or a SIPP? Assuming you can stand the pulsating excitement, you also need to make sure your contribution doesn't fall foul of the maximum percentage of what the Inland Revenue calls your "relevant" earnings. But Halifax building society and Barclays Bank this week set the new benchmark with deals priced at pounds 4.98 and pounds 4.50 per pounds 100 of mortgage interest cover respectively, payable for 12 months. Both offer cover for the self-employed and contract workers subject to certain conditions. The Halifax plan also comes with a repayment holiday option.However, the policies are not designed to fully replace state cover, so check carefully before you buy.. We all want lots of cash to spend when we retire. We know we need to put money aside for retirement while we are drawing a salary.

But, for several reasons, few of us act early enough or invest a realistic amount of our income in a pension One reason is the dreary complexity of pensions. If you buy a television nobody bores you with descriptions of the cathode ray tube. New borrowers, especially the self-employed and contract workers, are strongly advised to take out mortgage protection.Most lenders now offer standard protection policies, But the price, the level of cover and policy conditions vary considerably so it is essential to ensure you buy what you need.The price obviously depends on the cover required. Cuts in the social security budget mean that you will only qualify for mortgage interest benefit after nine months. But the abolition of stamp duty in the Budget is still a reasonable bet. As Mr Giles put it: "You would be daft to do anything before [the Budget]."And it's goodbye to the safety netIf you take out a mortgage after next weekend you will get no help from the state if you lose your job or fall ill.