Women, who live longer than men, will get less than men of the same age. An annuity is the way most people currently convert the money built up in a PPP fund or money-purchase company pension scheme into a regular income to see them though retirement. Recent reports suggest FSAVCs are being sold inappropriately by financial advisers You have been warned.Annuities. If someone tries to sell you an FSAVC, to run alongside a company pension scheme, remember that he or she is getting commission.

Both schemes are similar although the charges on AVCs are much lower. The difference between them is that every occupational pension scheme has a "tied" AVC for members to make extra contributions. You use these schemes to "top up" payments into your pension. AVC stands for "additional voluntary contributions" and FSAVC stands for "free-standing additional voluntary contributions".

This is good news but policy holders will still face the same big problem when they retire as those with personal pensions and company money purchase pension schemes - namely, annuities (see below).AVCs and FSAVCs More acronyms. A July 1998 survey in Money Management magazine found a policyholder paying in pounds 200 per month for 20 years would pay pounds 20,000 in charges on a Lincoln pension - one third of the total contributions!The Government has announced plans for "stakeholder" pensions, which will be low-cost, portable pension plans. What would you think if you were told 80 per cent or more of your first two years' contributions into a PPP went on charges ? This is money that will not fund your future, but someone else's - either the financial adviser who sold you the plan or the investment company itself.Over time, the effect of charges can erode your pension fund by many thousands. The mess is now being (slowly) sorted out and compensation paid to investors.But there's still the thorny issue of charges on PPPs. In other words, they get tax relief.PPPs are not as simple as they sound.

In the late1980s and early 1990s pension salesmen working on commission persuaded millions of people to switich out of perfectly good occupational schemes into personal pensions. Personal pensions give people who are self-employed, or who don't have access to a company scheme, the chance to save for retirement. They are similar to the second type of occupational scheme, the defined contribution scheme.The pension plan holder pays a percentage of his or her salary into a fund run by an investment or insurance company, and the government also contributes the tax the policy holder would have paid. This is called a money purchase scheme or defined contribution scheme.For most people, an occupational pension is probably worth having but they are not going to provide the single, all-encompassing answer to a prosperous dotage.Personal pension plans (PPPs). However, the employer is not obliged to make the pension up to any defined amount. Employers take a risk when they offer these schemes, so they are stampeding to the other option:2.