The full basic state pension is currently just £102.15 a week though the government has proposed that it goes up to one flat rate of £140 for all those yet to retire.

The chances are we'll all need a private pension to boost our income in retirement. And the bonus is this is a tax-free way you can put savings aside to provide you with an income in retirement.

Essentially for every £800 you save the government boosts it by £200 increasing your total to £1,000 if you're a standard rate taxpayer (20%). Higher rate taxpayers (40%) not only get this £200 automatically in tax relief but they can claim a further £200 on their tax return while those on the additional rate (50%) can claim a further £300.

There are several different types of private pension - whether provided by your company or yourself - which are described in more detail below. It's a complex area, so don't be afraid to ask for advice.

You might also have company pensions you left behind when you moved jobs which you want to transfer.  You should take advice before making any major decisions from a specialist regulated to give you free, unbiased advice about the whole market.

Personal or stakeholder pension

A regular personal pension - operated by a pension provider - allows you to invest in certain chosen funds (usually based around stocks and shares).

Stakeholder pensions were introduced in 2001. They are similar to personal pensions in many ways, but the provider's annual charge cannot exceed 1.5% of the pension's value.

In addition, stakeholder pension providers are obliged to allow the straightforward transfer of investments between providers and funds.

Self-invested personal pension (SIPP)

A self-invested personal pension - otherwise known as a SIPP - allows you much more control over how it's run. You get to choose the fund you want, or which individual shares you'd like to invest your money in.

Company pension

There are two main types of company pension: Final salary (also known as defined benefit) and money purchase (also known as defined contribution).

Final salary pension schemes are traditionally very popular with their members. Each employee is guaranteed a retirement income - based on a percentage of his or her salary - for the rest of their life.

The amount you receive depends on how long you've been with your employer, and what your salary was when you retired.

Unfortunately, more and more employers are saying that their final salary pension schemes are too expensive to keep open - and few people are likely to benefit from them in the future.

Money purchase pension schemes involve employees putting money into a retirement fund which is then invested, for example in the stock market.

On each employee's retirement, that fund is then used to buy him or her an annuity, to provide an income for the rest of their life.

With this sort of pension fund, there is no guarantee it will pay out a set amount on a person's retirement.