Most of us dream of spending our retirement enjoying ourselves. But how do we pay for everything when we are no longer working and earning a wage? That's where planning for your retirement and pensions comes in. To provide money for your retirement, most people rely on something called a pension

What's a pension?
A pension is really a savings plan. You put money into it over a number of years, and this money is invested in lots of things, like the stock market, property etc. Hopefully the things it invests in do well and your pension fund increases in value, but remember this isn't always the case, as stock-market-based investments and the value of property can go up and down.

When you decide to retire you are left with a pension fund of a set value, which you can then use to fund your retirement.

What types of pension are there?
There are five main types of pension:

State pension
Paid by the government when you reach state pension age. In 2003/2004 the full Basic State Pension is £77.45 a week for a single person and £123.80 for a couple.

Second State pension
This tops up the Basic State Pension, however not everyone qualifies for it. It used to be known as State Earning Related Pension Scheme (SERPS).

Company pensions
Many large companies offer employees the chance to join a Company Pension scheme. Some schemes are non-contributory, meaning the employee doesn't pay in any money, whilst some are contributory, so employees do make a contribution.

Stakeholder pensions
The newest type of pension around. These low cost, flexible pensions were introduced by the government to try and encourage everyone to save for their retirement.

Personal pensions
If you do not have a Company Pension, or are self-employed, these pensions were designed for you, although since the introduction of Stakeholder Pensions they are less popular.

Do I need anything more than the Basic State Pension?
Could you live on £11 a day? This is the full Basic State Pension for a single person. Whilst you may be able to top up this with means-tested benefits, so you get £102.10 a week, or just over £14.50 a day, this still isn't much to pay for everything.

That's why you may want to think about supplementing any State Pensions you get with saving and investing - either in extra pension plans, savings schemes or share-based investments, or a mixture of all three.

This section looks at what you can expect to get from the state when you retire and the different types of pensions available. It also looks at other things to think about when planning your retirement.

Remember this section just provides helpful information, no more than this, and if you are in any doubt you should speak to an Independent Financial Adviser (IFA).You'll find details of your local IFA in the Yellow Pages (www.yell.co.uk) or visit www.unbiased.co.uk