By Lana Clements

Around two-thirds of people who have given up work wish they had saved more for their retirement. The sooner you start saving into a pension, the better. Yet over half of 25-35 year olds have no form of pension in place, according to research from Aviva.

Judging by the questions twenty-somethings ask us about pensions, there is widespread ignorance and mistrust about the subject. People in their twenties may be tempted to switch off when the issue crops up, not least because retirement seems such a long way off. But just putting aside even the smallest amount of time and money now, could pay off hugely in the future.  

And now for the scare tactics

Consider how much you earn and spend at the moment. Consider how much you get with the state pension (£102.15 a week).  I'm fairly sure it's a big gap. The state pension age is also continually being pushed back, at the moment someone now in their twenties will not be able to draw the state pension until they're 68. 

If you don't have enough to retire when you want, you have to continue working, or live the life of a pauper. It's not appealing. The questions we were asked go some way towards revealing why there is  such a reluctance towards saving for a pension..

I've heard pensions are unreliable.  Why not just save your money rather than investing into a pension?

In a nutshell, because pensions mean free money, yes free. Better yet it comes from the taxman. "A basic rate (20%) taxpayer will only need to pay £80 into their pension and the taxman will make it up to £100, while a 40% taxpayer will need to pay only £60," explains Stan Russell, pensions expert from Prudential.

Ask about your company scheme, if it matches your contributions, this is even more free money, on top of the state tax relief outlined above. Quite frankly you would be a fool not to take advantage of this.

Edmund Downes, Aviva pensions manager adds: "Pension investments are generally relatively safe, although their value may rise and fall.  It is sometimes attractive to think that keeping all your savings in cash would be better, but in general the impact of inflation will erode the value of your savings over time if they are held in cash."

Why should I get a pension if I am buying a house? My dad says his private pension has hardly come to anything so it's better to invest in property?

The idea that it's better to focus on buying a property, rather than having a pension, is a stubborn myth. Aviva's Mr Downes says: "It is undeniable that many investments, particularly those based on the stock market, have not done as well recently as they have done historically, so probably your dad has just been unlucky, like vast numbers of other pension investors, rather than having done anything wrong."

But by purely focusing money on property, you are making many assumptions. Firstly, that you'll want to move to a smaller home when you reach retirement age, or that you have managed to buy a second property to sell at a profit. After all, you still have to live somewhere in retirement. Secondly, that house prices will rise. And thirdly, that they will rise enough to give a profit that will keep you in comfort for the rest of your retirement.

There was a property boom for the previous generation, but it doesn't look like likely such a drastic increase in values will happen again anytime soon. Over the last few years, the property market has been stagnant. The best move is to pull together a range of investments, which can include property.

Loads of companies have gone bust since the recession started, what happens to all the money invested if your company goes out of business? Would you lose your pension?

The woes of our economy have been well documented through mainstream media, and left many spooked and distrustful of financial companies. However, this shouldn't put you off areas of your finances, such as pensions, that are essential to your wellbeing.

The law acts to protect money invested into pensions. Mr Downes says: "Pension scheme investments must always be held separately from the employer, so if your employer does go bust the pension scheme assets should be safe."  

The level of protection depends on the type of pension held. Final salary schemes (which are rarer these days) potentially hold more risk if an employer goes out of business. But as Prudential's Mr Russell says: "If you have a final salary scheme pension, even if your company becomes bankrupt or insolvent, your pension will not be affected as it is guaranteed by the government-backed scheme, Pension Protection Fund. And pension funds cannot be used to pay off outstanding company debts."

If your former company can't pay up the fund will pay you all of your pension if you've reached retirement age or no less than 90% if you're younger.

The more common type of company pension is a money purchase scheme also known as a defined contribution scheme. Money saved into this scheme is held in your name and usually invested with an insurance company. So there is no risk of losing your money, although the employer will no longer be matching your contributions obviously.

Personal pensions are also held in your name so your employer can't touch your savings.

Hopefully we've changed a few minds about why you're never too young to start saving into a pension.