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Retirement should be something that we look forward to. A time when we finally get to do what we want with our time, whether it's world travel, regular rounds of golf, or playing with the grandchildren. However, for many, retirement can be a thing that causes dread. Instead of being a joyous thing, it is viewed as this thing hanging over us, prompting only the concern of how will we cope financially?

The good news is that by acting now you can make a difference. The first thing you need to do, though, is to make a commitment to save regularly for your retirement, even if you can only afford to put aside a small amount every month.

You then need to decide what you're going to do with your money? For those with just a little spare cash to invest, I'd suggest that there are basically three options:

1. Invest money in a pension
2. Invest money in savings
3. Invest money in both a pension and in savings

PENSIONS:
The way a pension works is that you invest money into a pension scheme over a period of years, and then when you retire you get an income. The size of income will depend upon the performance of the pension fund, which will be managed on your behalf by the company that you take the pension from.

The first thing to say is that the earlier you start to save for retirement, the easier it will be to build up the required retirement fund. Someone who is twenty who pays in just a little each month to a pension fund will have over 40 years for that money to grow in value. Someone who begins to save for retirement when in their fifties is going to have to put a lot more in each month to get the same result.

Pensions are a tax-efficient means of investing, as the money goes into the pension fund out of your pre-tax earnings. One way to think of this is that you put some money in and then the Government chips in the tax that you would otherwise have had to pay on that money.

SAVINGS:
As well as a pension, another option is to put money into a savings account. If you go with this approach make sure that you shop around for a competitive rate and also that you explore options for tax-free savings accounts. Internet savings accounts sometimes offer better rates than branch-based accounts.

It should be noted however that, whilst it's good to build up a savings fund, the return on savings accounts has historically not matched the return from shares or pension funds. They are a good low-risk option but on their own may not be sufficient to provide for your future, especially when the

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