National Irish Bank has recently introduced a Personal Investment Plan, its version of the PIP first launched by the bank assurers Ark Life and Lifetime, but this time underwritten by Irish Life.

With a 5 per cent bid offer spread and a 1 per cent annual management charge, it can be classified as relatively low cost - relative, that is, to the old life assurance savings plans which pocketed the first two years' premiums in commissions and charges. In this case, 94 per cent of contributions go directly into the investment fund, the illustrations of which are projected at a modest 4 and 7 per cent.

Yet, even with the fund growing at 4 per cent per annum, an annual contribution of £1,200 (paid monthly) will only be worth £1,170 at the end of the 12 months and the £78 you would have expected in profit had there been no charges is completely absorbed by the charges. Decent returns are achieved only if you leave your money untouched for at least 10 years.

Mr John Gilmartin, a fee-based, independent financial adviser with Dublin financial planners, Gunn Robinson O'Higgins, calculates that the charges reduce the fund growth by 2.5 per cent.

The actual investment fund must achieve an annual growth rate of about 6.5 per cent to give you a net return of 4 per cent. In the case of the higher projected illustration of 7 per cent that the bank is using, this means that the investment fund has to achieve a steady 9.5 per cent to achieve the projected return of £20,000 after contributions worth £15,090 are made over 10 years.

Given that pension investment funds, which have an extra advantage over ordinary savings funds in that they are not subject to any internal taxation, are only achieving average 10-year net returns of 911 per cent (after all charges), savers should look on the life companies' higher illustration figures with a certain scepticism.

"After four years, at a 4 per cent return, you will have earned £150 on this account," says Mr Gilmartin. "That's after saving £5,170. Had you put the same monthly contributions of £100, indexed at 5 per cent per annum into a building society which was paying just 2 per cent - half the rate achieved by the life company - you would have made £259, £159 more, at the end of the four years."

"You will sacrifice better long-term growth putting your money into the building society rather than into a mainly equities-based fund, but we're talking about a 15-year time-frame," he says. and He questions whether the majority of people can sustain such a long-term savings frame.

Instalment Savings from An Post, with a guaranteed 4.5 per cent return after five years is another worthy alternative.