step one: should I join my occupational pension?

If you are in work find out whether there is an occupational pension scheme. Indeed you may already be a member without realising it.

If there is an occupational pension available, you are generally best advised to join it. This is because in most occupational schemes your employer will contribute to it. Not joining it is therefore effectively giving up part of your pay packet. (But,confusingly, not every pension offered through the workplace is an occupational pension with an employer contribution. Some personal pensions - particularly stakeholders - can be offered through your job. These may make sense for you, but ask about employer contributions.)

Although some people are lucky enough to work where the employer makes all the contributions, normally you will be expected to contribute as well. Contribution rates for staff can vary but most fall within a range of three to eight per cent. You will get tax relief on these contributions so for a standard rate tax payer it effectively costs 78p to save an extra pound.

There are different kinds of occupational pensions. You can read an introduction at What kind of pensions do employers provide?

Employer contributions can vary a great deal in the different types. At the low end would be an employer contribution of four or five per cent or one that matched yours. In some final salary schemes employers have to contribute in excess of 20 per cent to keep them going.

There are risks associated with every type of pension. In the past savers in salary related schemes could lose very badly if their employer went bust. But the new Pensions Protection Fund now ensures that scheme members will still get most of their pension - though by no means all - if this happens.

So in general it makes sense for most people to join an occupational scheme to which an employer contributes, even if it is not among the most generous.

But you should think about other pension income as well, so you should take the next step to check your state pension.

NEXT: Step 2...