Generally the amount you are entitled to depends on how many years worth of National Insurance contributions you have built up throughout your lifetime. These are built up during time when you earned enough income through work to pay National Insurance, or were credited with NI contributions, for instance if you were a carer or if you were in receipt of certain benefits such as Jobseeker’s Allowance or Employment and Support Allowance (ESA). The DirectGov (http://www.direct.gov.uk/en/index.htm) site gives more information about how you will know if you are eligible for a state pension.

The additional or State Second Pension (also used to be known as State Earnings Related Pension Scheme or SERPS) may be available for you to claim on top of your State Pension. You may be ‘contracted out’ of this additional pension however. This can happen if you have a company, stakeholder or personal pension.

You may be able to get Pension Credit if you are claiming your pension and are on a low income.

These may be a good option for those who are self-employed or for some other reason don’t have a company pension scheme available to them. More information on personal pensions is available here.

Stakeholder pensions are a type of personal pension which must meet certain standards to ensure they are fair and secure. As with other personal pensions, you invest money on a regular basis and your pension will then be based on how much you have contributed and how well the investments have performed. When you retire, you can use your fund to buy something called an annuity, which will then give you a regular income for life. For more information on stakeholder pensions, see this site.

These schemes can often be the best way to start saving towards your pension, however you should remember that the scheme you join may ‘contract you out’ of the Additional State Pension, meaning you will no longer be entitled to receive this. For more information on company pensions, see this site.