Personal pensions are one of the most effective tax shelters especially given the increased limits for tax relief this year. Up to age 30, an individual may contribute up to 15 per cent of net relevant income; from 30 to 40, 20 per cent; from 40 to 50, 25 per cent and over 50 years of age, 30 per cent.

Some brokers are offering special deals to encourage individuals to set up a pension. Until November 1st, independent financial broker Ferguson & Associates is offering to set up a personal pension plan on a nil-commission basis for a lump sum or regular contribution for £150 per individual plan or for no fee with a flat rate of commission of 5 per cent deducted from each contribution. This is for an execution-only service and does not include advice.

Equitable Life also offers a no commission, no advice service for those customers who know which pension products they need.