Laura Slattery outlines how you can avoid nasty financial shocks when you stop working.

Is there anything more boring that being stuck at an endless succession of red lights during "rush" hour?

This week, drivers will at least have something to read to stop them falling asleep at the wheel. It's National Pensions Action Week, and the Pensions Board is handing out literature at traffic junctions, bus stops and train stations as part of its efforts to convince more people to save for retirement.

There are, of course, many people to whom mentioning the word "pension" is the equivalent to hitting an automatic snooze button.

Some 18 per cent of people who haven't taken out a pension who were questioned by TNS MRBI on behalf of the Pensions Board were honest enough to admit it: they are simply not interested in pensions.

"You don't need to tell me that pensions are not the most glamorous business, not the most exciting business," said Minister for Social and Family Affairs Séamus Brennan on Monday.

Brennan, the minister with responsibility for pensions policy, said it would take a cold, hard look at the statistics to jolt people into the realisation that the decisions they make now will affect how comfortable their retirement will be.

Out of a workforce of around two million people, around 900,000 do not have a private or occupational pension. If they leave it that way, many may have to rely solely on the State pension, currently €179.30 a week.

The Pensions Board, the statutory body appointed to regulate pension schemes and advise the Government on pensions policy, is now calling on people to take action to secure their income in retirement.

"Our message is: ask yourself where do you think your income will come from when you retire? If you cannot come up with a satisfactory answer, then now is the time to take the first step," says the board's chief executive, Anne Maher.

Here are five steps people can take to make sure there are no nasty financial shocks when they stop working:

1 Start your pension early: Almost two-thirds of people who haven't taken out a pension told the TNS MRBI survey that they couldn't afford it. But the longer people delay starting a pension, the more unaffordable it becomes to build up a decent fund.

For example, the Pensions Board's online pensions calculator reveals that a male aged 25 with a salary of €35,000 who wants retirement income of 50 per cent of his preretirement earnings will have to contribute a gross €241 a month to meet his target, or a net €101 out of his monthly pay packet after the tax relief on pension contributions is taken into account.

But if he waits until he is aged 35, he will have to start making contributions at the more hefty rate of €359 a month (€208 net) to meet his modest target, which includes the income he will get from the State pension.

The above figures relate to insurance-based pensions. This includes personal pensions sold mostly to self-employed people, Personal Retirement Savings Accounts (PRSAs) and people who belong to defined-contribution occupational schemes.

People who belong to another type of occupational scheme known as defined-benefit will also get a higher pension the earlier they join, as these pensions guarantee a pension based on a percentage of your final salary for each year of service you clock up.

2 Get advice: Many self-employed people shun pensions in favour of investment properties or business assets that they can sell off when they eventually retire. But a pension may still be the most prudent and tax-efficient way to fund their later years.

It will be a smart move to consult an independent financial adviser, preferably a fee-based one who won't push unnecessary products in order to make money from sales commissions.

Meanwhile, employees who are not members of occupational pension schemes should ask their employer about a Personal Retirement Savings Account (PRSA). By law, the employer must appoint a PRSA provider and facilitate payroll deductions if employees want to contribute.

3 Blow the whistle: Employers who neither offer an occupational pension scheme nor appoint a PRSA provider are breaking the law.

The Pensions Board and inspectors from the Department of Social and Family Affairs conduct audits on employers to check they are complying with their obligations, but employees can always help things along by blowing the whistle on their employer using the Pensions Board's lo-call information line on 1890 656 565.

Some employers run an occupational pension scheme but only allow certain employees to join. This too may be in breach of the law. Part-time and fixed-term contract workers should be given equal treatment in relation to pensions.

This means that these employees should be allowed to join the occupational scheme, to which the employer contributes, rather than being fobbed off with a PRSA, to which most employers contribute nothing.

4 Seek information: This includes getting a copy of the scheme booklet if you are a member of an occupational scheme.

The most crucial detail occupational scheme members should know is whether the scheme is defined-benefit or defined-contribution.

About 40 to 50 per cent of defined-benefit schemes are currently failing the Pensions Board's minimum funding rules, meaning that if the scheme was wound up it wouldn't be able to pay out the benefits promised.

However, these schemes are still some way better for employees than the defined-contribution variety, which make no promises at all. Instead, the level of pension depends largely on the long-term investment returns generated by the stock market, and nothing is certain in the world of equities.

People buying personal pensions should ask for full information on the fees and commissions charged under the pension and shop around using discount brokers to see if they can save money.

Anyone with any kind of private pension should ask either their employer, broker or insurance company for a projection of what their pension will actually be worth when they retire, based on their current contribution rate.

5 Make AVCs: Additional voluntary contributions (AVCs) could be the difference between making ends meet and actually enjoying your retirement.

Many workers join pensions late or have broken service. AVCs are a way to make up for lost time. They can also boost retirement income where the underlying pension scheme doesn't offer a very high level of benefit. Most people don't take full advantage of the tax relief available on pensions contributions, so there is usually plenty of scope for people to make tax-efficient AVCs.

The maximum tax relief for people under 30 is 15 per cent of their net earnings. People aged 30-39 can contribute up to 20 per cent, while people in their 40s can get tax relief on up to 25 per cent.

The limit rises to 30 per cent of net earnings for people aged 50 and over, by which time people have finally got around to checking their projected pension estimates and begun to panic.