It is easy to fall into the trap of investing in "pensions" without being aware of the underlying investments and how they fit in with your other savings.
If you have more than one pension plan you could end up with the investment equivalent of a dog's dinner. What you need is a co-ordinated, well balanced financial plan for retirement.
It is wise to spread risk by investing in a range of equities (shares) and other assets either directly or through collective funds such as unit and investment trusts.
The four main types of securities listed and traded on the UK Stock Exchange are:
Conventional wisdom suggests that younger people should invest virtually 100 per cent in equities because this offers the best long term growth prospects.
As you get older and closer to retirement you need to switch gradually into safer assets such as bonds and gilts and by the time you are within a few years of retirement experts recommend that most people should be entirely in gilts and cash.
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