Life and pensions companies are cranking up their advertising campaigns this month to encourage those who are self-employed to begin a pension plan or make a contribution to their existing pension plan.

Anyone who makes a contribution to a personal pension before January 31st can elect to claim it against their taxable income of the previous tax year (in this case 2000/2001).

But the big pensions change on the horizon is the introduction of the Personal Retirement Savings Account (PRSA).

Scottish Provident Ireland has launched the State's first "PRSA-friendly" pension plan. The new Select Retirement Account is part of the Scottish Provident Select pension range and its charging structure meets the proposed PRSA standards.

The Personal Retirement Savings Account is the new pension product being introduced by the Department of Social, Family and Community Affairs.

The PRSA scheme is being championed as more affordable and transparently priced products that aim to increase pension provision.

The pension plan will be attached to the individual rather than employers and will allow total flexibility to stop and start contributions.

PRSAs are expected to be available to the public by the end of this year or early in 2003.

When introduced, the Government standard will allow a maximum 5 per cent charge on each contribution paid and a fund management charge that does not exceed 1 per cent per annum. No other charges can be levied on the consumer for the purchase or maintenance of a PRSA.

Fixed monetary charges and penalties on ceasing contributions or transferring the policy will not be permitted.

Scottish Provident's new charging structure is available on pension products designed for the self-employed, those who want to start a company pension plan and employees who want to make additional voluntary contributions to their existing company pension scheme.

There will be many more offerings of the "PRSA-friendly" type throughout the year.