Other saving options

Stakeholder pensions. These are on offer from April 2001 with the aim of providing a low-cost, transparent and flexible way to save for retirement. This widens the choices available to employees seeking to save additional funds.

Individuals can contribute up to £3,600 annually, irrespective of earnings, into a Stakeholder scheme. Stakeholder pensions, which will be provided through most financial institutions, also guarantee minimum standards on issues such as charges, access and flexibility.

ISAs. A popular type of flexible investment, with the advantage of tax-free interest subject to certain conditions. These are provided by most financial institutions and have a maximum investment limit set by the Government - currently £15,240 a year overall.

Stocks and Shares. Investment in listed companies on the stock market can be one way of saving. Investments can be made in ordinary shares (equities), from which you will receive income in the form of dividends, together with the potential for an increase in the value of your investment should share prices rise. However, share prices can go down as well as up, so this type of investment should not be entered into with a short-term view.

Bonds. Insurance bonds are another vehicle for investment. They are generally thought to be less risky than shares and some guarantee a return. With-profit bonds invest in a mixture of equities, bonds and other investments.

FSAVCs. Free Standing Additional Voluntary Contributions (FSAVCs) are similar to AVCs but are provided independently of the Pilkington Superannuation Scheme. Insurance companies and other financial institutions offer these but you should be aware that they could involve higher charges and some of your contributions being diverted to pay commission to the sales adviser.