If you have a money purchase pension scheme, you will need to buy something called an annuity before you reach the 75.

This effectively "unlocks" the money that you have saved in your pension fund to provide an income in retirement.

The amount you get will depends on your age, sex and medical history - and the current annuity rate.

The problem facing people retiring now is the poor annuity rate on offer.

It has virtually halved over the last ten years.

The rate is crucial because it determines how much income a person will receive for the rest of their life.

What determines annuity rates?

Annuity providers invest largely in ultra-safe government stock, and the rates of return available from this type of investment is closely linked to the Bank of England base interest rate.

The Bank of England base rate is currently at a very low level. This means the return on government stock is poor and annuity rates on offer to people retiring now are at the lowest level for a generation.

Someone who purchased an annuity 10 years ago - when interest rates were higher - would have got twice as much income than they would today.

Are there any other options?

In the current low annuity rate climate, many people are having to revise their retirement plans.

When it is time to buy an annuity - members have the option to delay buying an annuity until age 75 - the pension scheme manager will write outlining the annuity rate that they currently offer.

However, pension scheme members have the right to shop around for the best annuity rate, under an "open market" option - and can often get a better deal by doing so.

Members of personal pensions and stakeholder schemes can also normally take up to 25% of their fund tax-free.

Also, if you are a member of a group personal pension or a group stakeholder plan, you can take up to 25% of your fund tax-free.

When you take your tax-free lump sum you usually have to buy an annuity with the rest of your fund.

Where can I get further information?