Of all the personal finance decisions made by an individual, pension planning is the most important and potentially fraught with difficulties. As such, it should be a well considered process involving detailed information, realistic expectations and expert advice.

A Family Money reader, Mr K from Kinsale in Co Cork writes that he is looking at topping up his existing pension but is concerned at the "outrageous" charges for such schemes and that in some cases the first five years of the premium is more than the value of the fund. Equitable Life has a straight annual charge, so at least you know what you're paying, he says.

While it's true that much of a pension's value is eaten up during the first years, receiving proper pension's advice is absolutely essential since you will be relying on those funds when your earning power is greatly diminished. Therefore any mistakes may be costly ones.

Discounted products like those offered by Equitable Life are an excellent choice for those familiar with the pensions area, its possible pitfalls and their own needs. Usually, lower-cost plans do not offer advice and provide consumers with a more limited choice of products than full service competitors.

Unless our reader is well versed in pensions, he should go to an independent financial adviser, says Watson Wyatt benefits and investment consultant, Mr Joseph O'Dea. "Most of the advisers in the market would be willing to operate on a fee basis, so he wouldn't pay commission," he said.

It is important that if you're paying for advice that you actually receive it. "The classic saying is that good advice is expensive, but bad advice is even more expensive," says Mr O'Dea.

Some insurance companies are trying to appeal to people like our reader by spreading charges over the life of the pension. CGU Life says set-up charges for its Executive Portfolio Pension are reduced from 50 per cent in the first year to 5 per cent, meaning 95 per cent of all pensions contributions are invested in year one. This reduction is recovered by charging a fee of 5 per cent of the total pension every year.

Unlike almost all competitors in Ireland, says CGU Life, it does not charge the usual 5 per cent bid-offer spread on any of its contracts and its charges are transparent.

Changing around fee structures does not necessarily mean they're reduced over the life of the fund. Most often they're made up elsewhere. CGU charges 1.75 per cent per annum of fund value effectively to make up for the lack of a bid-offer spread. However, loyalty is rewarded after the contract has been in force for 10 years in the form of a bonus of 0.75 per cent per annum for each year.

By its design, this type of pension has excellent early surrender values but some of the larger brokers can also obtain these from the likes of Irish Life, says Beckett's employee benefits consultant, Mr John McGovern.

As an alternative to high commission pensions, our reader was hoping a British-style low-cost, high-performance pension scheme based on a long-established investment trust was available here. As he has an existing pension, he believes that he can afford to be brave, especially with an average annual charge of only 0.6 per cent.

In Britain, a personal pension plan is on offer which has been issued by an investment trust house but these products are not available in the Republic, says Financial Engineering Network's Mr Jeremy Walker. Legislation in this area is quite different from Britain and as a result the Republic does not have as many products on offer.

Since our reader does not specify his age or whether he's in a company pension scheme or is self-employed, a recommended course of action is difficult to determine.

Companies here may or may not have an additional voluntary contribution (AVC) plan. If not, an individual can set one up, but it's expensive, says Mr Walker.

In general, individuals in a company pension scheme may contribute a maximum of 15 per cent of their salary as a personal contribution to the plan. If our reader is only paying 5 per cent, he may wish to increase to the maximum amount by putting in an additional 10 per cent. This will also increase his tax savings. If he is self-employed, he should go to a fee-paying broker or adviser.

A more straightforward investment, in a unit trust, does not offer the same tax breaks as pension contributions. Specific pensions advice depends on a person's age, circumstances and dependants, says Mr O'Dea. "If someone is 50 to 60, they shouldn't be looking to invest in volatile assets." Tom Finlay, Working Life, back page, this section