Money matters

If you have the opportunity to contribute to a company scheme do so as soon as possible, particularly if your employer is making contributions, or links your pension to your final salary, rather than relying simply on investment growth. If you don't have access to a company scheme then stakeholder pensions are the next best alternative. These are far more flexible than traditional personal pensions (there are no penalties for stopping, starting or changing contributions), and charges are capped at a maximum of one per cent a year.

However, younger people may want to consider saving into an Isa instead. Although the contributions you make do not qualify for tax relief, any interest earned or investment gains are tax-free. And Isas allow you to access your money before retirement age - so can be far more flexible. You can always move these savings into a pension plan at a later stage.

When is the best time to take out an Isa?
People can save a maximum of £7,000 each year into an Isa: £3,000 of this can be placed in a cash Isa - basically a tax-free deposit account, with the remainder going into a stocks and shares Isa. To make use of this allowance you have to take out an Isa before the end of the tax year - which falls at the start of April.

Inevitably most people leave it to the last few weeks of the year to buy an Isa. In the scramble to meet the deadline, many people do not think through what they are buying, or why, and may end up with an unsuitable product. It is far more sensible to buy an Isa earlier in the year - or even take out a regular savings plan which allows you to save a little each month rather than sink a lump sum into the stock market all in one go. Regular savings help smooth out the ups and down of the stock market.