When the first state "pension" was set up in the last years of Queen Victoria's reign, it was basically introduced to alleviate abject poverty in the last few remaining years of life.

Indeed, a great many of the population never reached "retirement" and those who did, often only survived for a couple of years.

Today, the widespread early retirement, advances in medicine and health awareness meaning people live frequently into their 80s and 90s, retirement planning is a vital part of financial planning.

For those who don't enjoy the benefits of a company pension scheme and have to rely on taking out a Personal Pension, you could easily pick up the phone and sort one out there and then.

But before you start dialling, consider two points: This phone call may dictate your income for perhaps a quarter of your lifetime, and how much do you know about pensions at the moment?

Unless you are an expert on the subject already, here are some of the things you need to consider when choosing a pension plan:

l Investment Choice: Most pension companies will offer a wide range of funds and some will even include the facility to automatically switch between them to take advantage of capital growth in the early years and provide more security as you reach retirement. Some companies sadly offer very little choice.

l Flexibility: You should be able to increase and decrease contributions and be able to pay in lump sums at any time. Also as your circumstances may well change in the future, so you may need to stop and start contributions. In addition to this, it would be as well to check if it is possible to convert it at no cost into a different type of plan if your employment circumstances changed, perhaps to an executive pension or a free standing AVC. Again most leading pension companies can handle this.

l Illness: You should always think carefully about protecting your future pension against long term illness or injury by including "Waiver of Premium" so that if you can't work for prolonged periods your future income would be safe. The cost for this is generally only about two per cent of the premium and given the level of State Benefits, it is absolutely vital.

l Early Retirement: People are retiring over a wide variety of ages, and while the rules allow you to take your pension between 50 and 75, you need to check if there are any penalties should you end up retiring earlier than you planned.

Unlike a simple car insurance or life policy, there is more to choosing a pension than just getting a couple of quotes and comparing costs and charges. Financial strength and past performance are also very important.

Spending a few hours getting independent advice is the best move to make sure your retirement is likely to measure up to your expectations. A free factsheet on Personal Pensions is available by ringing 01484 860123.

Converted for the new archive on 30 June 2000. Some images and formatting may have been lost in the conversion.