In addition, for the first time, under the Savings Credit, those aged 65 and over will be rewarded for some of their savings and income that they have in retirement.

In the past, those who had managed to save a little were no better off than those who had not saved at all.

The Savings Credit will change this by giving new money to those who have saved - up to:

Mrs Shepherd should gain from the introduction of the Pensions Credit in two separate ways.

The Guarantee Credit is higher than the current level of the MIG. She will also benefit from the introduction of the Savings Credit, up to 60% of the level of her private pension.

People like Mrs Shepherd, who are currently receiving the MIG are being contacted by the government. They will automatically calculate her entitlement under the Pensions Credit system.

(If you want to apply for Pension Credit, you can phone the Pension Service on 0800 99 1234.)

(For a copy of Age Concern's Fact sheet number 48 (Pension Credit), you should call (0800) 009966 or visit www.ageconcern.org.uk)

Joseph is 61 and retired on an occupational pension. He's paid national insurance for 46 years which entitles him to a full pension yet they still deduct National Insurance from his pension. What do you think?

I am puzzled. Pension payments, either to former employees or dependants of deceased employees, are not included in gross pay for National Insurance contributions purposes, regardless of the person's age.

It appears a mistake may have been made by the pension scheme, and Joseph should be entitled to a refund. He should contact the scheme trustees and ask them to resolve the situation. If they do not do this, Joseph should get in touch with OPAS.

Andrew is a self-employed sole trader and wants to know why there can't be DIY pensions, or "elected" pension funds. He says you can do DIY house or car maintenance, why not DIY pensions?

There is no rule which says that you have to provide for your retirement income through a pension plan.

You can provide for your income in retirement through other means such as Isas or investing in property.

A pension is a product which facilitates savings in a tax-efficient environment, and places restrictions as to when and how the fund is taken.

There is however a type of pension scheme, which allows the member to have more control over the investments of his pension fund and this is called a Self Invested Pension Plan - SIPP for short.

These plans allow you to invest directly in shares or even commercial property within the wrapper of a personal pension arrangement.

Norman Eve's wife is in a final salary pension scheme and has been for about eight years.

She may have the opportunity to reduce her working week by one day with a corresponding reduction in salary.

Can you advise how this will effect her pension if she continues to work to the normal retirement age of 65 in about eight years' time or if she retires at 60?

Final salary pension schemes base benefits on the scheme's definition of final salary and length of service in the scheme.

The exact effect on Mrs Eve's benefits of her becoming part time will depend upon the rules of the scheme.

Mrs Eve will almost certainly suffer a reduction in pension compared to if she had stayed on her full-time hours.

It is likely that her pension for the period between now and her retirement will be reduced by one-fifth. The benefits she has accrued to date will not be affected.

Mrs Eve should contact the scheme trustees for confirmation of the exact effect on her pension.

Stephen Phillips of Wrexham says: "Some time ago an article on your programme referred to a pension being paid to a surviving partner. Although not married - and in the case you featured the parties were gay - the pension company refused to make payments.

"You stated that this case was going to the European Court of Human Rights. I would be most interested to know if a judgement has been reached on this subject."

The position at the moment in relation to survivors' benefits varies dependant upon the type of pension scheme involved. In the case of the state pension, only married couples are provided for.

In the private pension field, it depends upon the rules of the scheme. In recent times, a good number of company pension schemes have amended their rules to provide for unmarried and same sex relationships.

I think that Mr Phillips is referring to the European Directive for Equal Treatment in Employment & Occupation. The Directive should be adopted by member states by 2 December 2003.

The purpose of the directive is to prevent discrimination based on religion or belief, disability, or sexual orientation and affects occupational pension schemes as a form of pay.

A consequence of the directive is that where schemes provide beneficiary pensions to married partners only, it could be deemed discriminatory, particularly in relation to homosexual and unmarried employees.

However, in what form the directive is adopted in the UK and its implications, remains to be seen later this year.

Mr Warren says when he receives his pension statement, it states his current fund value. However, there never is any reference as to what the fund is likely to produce in terms of a weekly or monthly income. What can he do about this?

The issue that Mr Warren has raised is being tackled by the introduction of what is known as Statutory Money Purchase Illustrations (SMPI).

Most benefit statements from April this year are now required to provide an indication of the potential pension income, that the policyholder could expect when they retire, in today's prices.

These illustrations are based upon a number of assumptions about the future and consequently there is no guarantee of the final amounts, which could be higher or lower than those forecasted.

Glen Kennedy from Hampshire is a freelance engineer on Pay As You Earn for an agency. When he's between contracts he can be off work for anything from a few days to a few weeks which means it's not always viable for him to sign on the dole.

How, and where, does Glen pay his contributions to keep up his pension rights?

As he's 56 next birthday he's keen to ensure the department has no excuses to cut or refuse his state pension.

Glen does not have to have been employed for the whole year for it to count as a qualifying year towards his state pension entitlement. All he has to do is earn over a certain amount (called the Lower Earnings Limit) - this year it is �4,004.

To qualify for a full pension, you need to have paid (or be credited as having paid National Insurance contributions for 90% of your working life - usually 44 qualifying years for a man.

Currently men receive an automatic credit (where necessary) between the years of 60 and 65.

Glen should obtain a forecast of his state benefits, based on his current circumstances. This will tell him if there are any gaps in his National Insurance record. He can get this by phoning the State Pension Forecast Line on 0845 3000 168.

Bill Turney from Buckinghamshire says that a year ago he withdrew the remains of his pension fund from Equitable Life after losing approximately �30,000.

He placed this money with Standard Life hoping that they would be more responsible. He has just received his annual statement and was horrified to find that in just one year his pension pot has dropped by more than �10,600, and Standard Life have "had the gall" to charge him a further �500 for the privilege.

He asks: "Is this nightmare ever going to end? What is the point of continuing these investments?"

Most people will by now be aware of the ongoing Equitable Life saga and Bill certainly seems to have been the victim of an unfortunate series of events.

As far as Bill's Standard Life pension is concerned, pension schemes are designed to be long term investments and it is possible that the value of an individual's funds can drop during times when returns are poor.

Bill should have had a choice of funds in which to invest when he took out his pension. If his funds with Standard Life have been invested in accordance with his wishes and the policy contract that he agreed to when taking out his pension, it is likely that there is little that he can do.

As most people will be aware, the last few years have been a particularly difficult time for investors (including pension funds) and the value of investments such as stocks and shares has generally fallen.

Having said that, Bill should check that his funds have been invested in accordance with his instructions and contact Standard Life to ask for a written explanation.

It is possible Bill may have the option under his scheme of switching his funds into a more secure environment such as government bonds.

Bill should consider, however, whether now is the best time to switch, or whether he should allow Standard Life some leeway to try to recover their losses (assuming he has enough time available before his retirement).

Keith Hopkins from Kent stopped working over five years ago.

He has a modest occupational pension.

Given the state of pensions right now, would he be better off taking out a chain of endowments instead of a pension, to avoid any future problems created by being compelled to take out an annuity?

He thinks this might be a more flexible solution.

The main attraction of saving through a pension is that you receive tax relief on your contributions. In Keith's case, assuming he is a basic rate taxpayer, for every �100 he invests the government adds another �28.20 to it. So �100 immediately becomes �128.20.

As Keith is not working, the maximum he can save each year into a pension is �2808 net of tax, which with the tax relief increases immediately to �3600.

The main advantage of an endowment is that you have access to all the capital on maturity, whereas with a pension, only a maximum of one-quarter of the fund is available as a (tax-free) cash sum. The other three-quarters of the fund you build up must normally be taken as an annuity (by the age of 75 at the latest), which is subject to income tax.

However, even if Keith doesn't want to invest in a pension, an endowment may not be the answer for him.

They have not always proved to be great investments in recent years. I would recommend that Keith gets some financial advice in writing from an authorised adviser.

IFA Promotions can put Keith in touch with a few financial advisers in his area. Their number is 0800 085 3250.

Bob Abraham asks what will happen to money in a final salary company pension if the company goes bust. Will his money be safe?

He still has over 20 years to retirement, but doesn't want to find out in 20 years time that the money he's invested would have been better spent backing a horse instead!

Final salary schemes have traditionally been seen as the best type of company pension scheme so far as the employees are concerned.

This is because, as a member, you are largely shielded from any fall in the investments underpinning the scheme.

The investment risk and indeed the responsibility for making good a deficit in the required funding levels falls on the employer and not you.

Your pension entitlement is calculated as a proportion of your final earnings based on the number of years you have been in the scheme.

After 40 years service you could end up with a pension equating to as much as two thirds of your earnings which together with your state pension should give you a good level of income for the rest of your life.

The downside of these types of scheme comes if and when the employer goes bust and the scheme is found to be underfunded.

There is currently no insurance cover for such a situation (although the government is said to be considering the feasibility of introducing this type of protection).

When a company goes bust, the available funds have to be shared out on the basis of a specified priority order.

Broadly speaking, in the arrangements for winding up the scheme, pensions in payment come first before those of current or former employees who have not yet retired. This can and often does mean that for people in the latter category their expectations are not met.

If Bob has any reason to doubt the viability of his company and/or its intentions towards the continuance of the scheme, he should start to ask a few pertinent questions and seek to obtain what information he can - either on his own or through his trade union.

For example, what assurances have the company given or are prepared to give about their continuing support for the scheme? Is it possible to get hold of a copy of the last company accounts?

Insofar as the scheme itself is concerned, Bob could exercise his right to contact the trustees and ask for a copy of the last valuation report (These have to be carried out at 3 yearly intervals).

Hopefully, this will help to reassure him. The alternative of transferring his benefits to an individual pension scheme would not normally be considered good advice, not least because Bob would forego any employer contributions.

Before contemplating such an extreme step Bob should obtain independent financial advice in writing.

Celia Sandars has a question about Home Responsibilities Protection (known as HRP).

She has been told she is not entitled to claim HRP for a period between 1967 and 1984 when she was at home looking after her family, as she had previously elected to pay the reduced "married women's" rate of National Insurance contributions.

In consequence, Celia says she has lost out on her state pension entitlement. She asks what she can do to pursue her case.

HRP was introduced on 6 April 1978.

If you are looking after a child or a sick or disabled person and are unable to work, you may be able to benefit from HRP.

This arrangement provides for the protection of your basic state pension (and widow's benefit) by reducing the number of qualifying years that you need in order to obtain a pension.

From 6 April 2002, you may also be entitled to some benefit under the Second State Pension.

Those women who have elected in the past and still retain the right to pay reduced rate National Insurance contributions are not eligible for credits under the HRP systems.

It is however our understanding that married women cease to be treated as having reduced rate status, if they are not liable to pay NI for two consecutive years since 6 April 1978 (which is also the date that HRP was first introduced).

In order for this to happen, Celia should not have undertaken any paid employment at all during these two years.

Celia may therefore be able to claim HRP from the tax year 1980/81 to the one in which she ceased to care for her family full time, and she should therefore check the information she has been given.

Allan Jeans of Dorset is looking for some advice about AVC's or additional voluntary contributions.

His wife is a top rate tax payer and has been advised to stop paying AVC's and put the money into a maxi ISA with a projected return of about 7%. Is this good advice?

The fact that Mrs Jeans is paying AVCs means that she must be a member of her employer's company pension scheme.

OPAS is not able to give specific individual investment advice though we do try to help people to understand the choices they have.

It is a good idea for individuals to review the level of pension they have built up (along with their other investments) on a regular basis.

Although ISAs do have their advantages, such as the fact that you are able to draw benefits under an ISA tax free, it is currently planned that the amount that you can contribute into a maxi ISA will drop from �7,000 to �5,000 from the tax year 2006/07.

Furthermore, the government has not guaranteed that returns from ISAs will always be tax free.

If Mrs Jeans is paying AVCs into a pension scheme, she will be receiving tax relief on her contributions at her highest marginal rate, i.e. 40%.

Furthermore, if proposals recommended in the Inland Revenue's recent paper on the Simplification of Pensions are to be introduced, it is possible that she will be able to draw 25% of her AVCs as a tax-free cash sum at retirement.

This does not mean, however, that AVCs are necessarily a better bet than ISAs.

The precise answer will depend upon an individual's circumstances but it is often a good idea to have a wide range of investments.

There is useful leaflet produced by the Financial Services Authority, which Mrs Jeans might find useful in deciding the way forward.

"The FSA Guide to Saving for Retirement - Reviewing Your Plans" can be obtained by telephoning 0845 606 1234, or you can download a copy from the FSAs' website.

If, having reviewed her options, Mrs Jeans would like definitive advice as to which route she should take, she should seek independent financial advice in writing from an authorised adviser.

Robin Potts resigned from Pilkington Glass last year aged 33 after 7 years' service and requested a transfer value for his pension.

As company pension scheme regulations were changed recently they seem to have acquired powers to lock me into the scheme and have said they are "no longer calculating transfer values, until further notice".

This means his retirement fund is trapped until it suits Pilkington to allow him to transfer it.

Is there any thing Robin can do?

Pension scheme members are entitled to request a transfer value from the scheme trustees, which should normally be provided within three months.

Many final salary pension schemes however currently have deficits - that is where the value of the liabilities exceeds the value of the assets.

Concern has arisen recently as some schemes may not be sufficiently well funded to pay full transfer values without weakening the scheme's funding position and reducing the level of security for the remaining members.

This is a particular problem where the latest valuation of the scheme is out of date.

The government is in the process of introducing regulations to allow trustees to reduce the level of transfer values to reflect the scheme's actual funding position.

The pensions regulator, OPRA, has recently indicated that it will not apply sanctions in certain circumstances to schemes who decline to provide full transfer value quotations.

The regulations have not yet been introduced however and OPRA's stance does not itself remove a member's legal right to quotation and payment of a full transfer value.

Robin can contest the approach taken by the scheme by writing to the trustees if he has not already done so.

If Robin wants to discuss matters further he can call the OPAS Helpline on 0845 601 2923.

Mr J Moors says not so long ago financial advisors were advising everyone to contract out of paying their National Insurance contributions.

Is it still good advice or would we be better to go back in?

The aim of opting-out of the second part of the government's state pension system, known as the State Second Pension (S2P), is that when your National Insurance contribution rebates are invested in a private pension, they may (or may not) generate a higher pension than S2P itself would have paid.

OPAS is not able to give specific individual investment advice, but can try to help him understand the consequences of his decision.

Some pension providers are saying it's not worth the risk. S2P provides benefits based on a set formula (albeit a complicated one based on an individual's revalued average earnings), whereas benefits provided under money purchase pension schemes depend upon a number of factors such as the investment performance of the scheme and annuity rates at the member's retirement.

The decision will however depend on a number of factors in each case, such as the individual's age and the amount that they earn.

From 6 April 1997 there was a change in the way that the rebate (of National Insurance) payments were calculated that is also relevant.

From this date onwards, the level of rebate that an individual receives increases as they get older.

Mr Moors should therefore review his existing opted-out arrangements (this is particularly relevant if he is earning less than �11,000 per annum).

Mr Moors' financial adviser or the company running his scheme should be able to look at his situation and advise whether or not he should contract back into the State Second Pension.

He should ensure he obtains written advice.

Mr Moors can obtain a useful leaflet explaining the background to Contracting-out entitled "Contracted-out Pensions - Your Guide (PM7)" by calling 0845 731 3233.

He could also get a more detailed guide to the rebates that are given called "The Employee's guide to Minimum Contributions", by contacting the National Insurance Contributions Office on 0845 915 0150.

If Mr Moors decides to contract back into the State Second Pension, he will need to complete a form (CA1543), which he can request direct from his personal pension provider.

The opinions expressed are Malcolm's, not the programme's. The answers are not intended to be definitive and should be used for guidance only. Always seek professional advice for your own particular situation.