An Irish Times guide to the world of personal finance. This week questions regarding pensions, SSIAs and saving certs are dealt with.

Pensions

I am 44 years old and do not have a pension scheme. I am not particularly interested in handing over money every week for some broker to play with and take commissions from. What I would really like to do is to have my own savings scheme whereby I would have ultimate control over it. I have invested the maximum amount in one of the SSIAs with this in mind. Is there any other place where I could put my money with a reasonable good return? Is there any way I can have tax credits for this money? This is all new to me so please excuse my ignorance.

Ms C.M., e-mail

While your wariness of the investment industry is commendable, it is possibly a little too stringent in this case. If somebody is working on producing a return on your money - whether it's a broker, an assurance company or anyone else - it's hardly too much to expect that they be paid for their effort.

I am conscious that the life and pensions industry has not done itself any favours in the lack of transparency evidenced at times in its charging structure but that should not put you off the idea itself - most particularly since there is no way you are going to secure equivalent tax relief elsewhere. Essentially, the Government is allowing you 42 per cent - assuming you are a higher-income taxpayer - on any sum you put into a pensions policy.

More importantly, your position is critical if you have yet to make any pension provision at the age of 44. No matter with whom you invest money to provide for your retirement, it is going to take considerable sums and time for it to yield sufficient to keep you going after you give up work. Remember that women in Ireland live, on average, to 79 years of age. That is 14 years on which you are likely to rely on your pension and you are only allowing yourself 21 years at most to accumulate it.

Unless you can afford to put a substantial portion of your salary into a pension programme of some sort, starting now, you are likely to face retirement in sharply reduced circumstances.

From next February, Personal Retirement Savings Accounts (PRSAs) will come on stream. These will allow more control and clearer presentation on charges than heretofore and sound ideal for someone with your concerns.

As to putting your money somewhere other than a pension and getting a reasonably good return, the truth is that you are going to be taking a gamble no matter where you put your money and, in the absence of tax relief, the chances of that investment making up the 42 per cent you are forsaking by not taking out a pension are remote to non-existent.

Forget what people tell you about staying away from pensions at the moment because of falling markets. Pensions are a long-term project and the markets will even themselves out over that time. When that SSIA matures, I'd put that into your PRSA or whatever other pension policy you opt for.

SSIAs

I have an SSIA and am worried by what I am hearing about the prospects of the whole scheme being cancelled by the Mr McCreevy. What is happening and is my money safe?

Ms E.B., Dublin

The first thing is to reassure you that your money is safe. There has been a lot of speculation about what the Minister for Finance, Mr McCreevy, might do in next month's Budget with the special savings incentive scheme. Essentially, it is a luxury he can no longer afford. Having said that, the Minister has shown himself remarkably reluctant in the past to admit to errors in previous policy.

Some people say it is a scheme giving money from the State coffers to those who already have. They also point to the fact that Mr McCreevy might well quell mutinous mutterings from SSIA holders by appealing to their self-interest - continuing to pay the bill for SSIAs will mean less money elsewhere for the likes of health and education or more taxes. Your choice, he may well say.

On the other hand, there are those who claim the Minister has encouraged people to enter contracts with institutions - especially those holding equity SSIAs - that make no sense over a one- or two-year period. The Minister cannot see the State's part of these contracts (the 25 per cent bonus) broken, they say.

It does look likely that some changes will take place. At worst, accounts would be frozen with existing contributions honoured and accumulating interest or market gain, if any, over the balance of their five-year term. Less drastic would be the capping of State exposure to SSIAs by telling savers they can not raise the amount they currently invest in the scheme on a monthly basis.

Whatever happens, it would not be a bad idea to put into your SSIA account this month - the last before that crucial Budget - the maximum you can afford. You can always lower it later if nothing comes to pass.

Savings certs

My savings certificates have just matured and the latest issue only gives a return of 2.74 per cent over a five-year, six-month period. Rather then re-invest with such a low return, can you advise on how best to invest lump sums that would give higher returns but with minimum risk involved?

M.B. Westmeath

I know the main selling point of savings certificates is that they are a secure investment guaranteed by the State but to suggest that they live up to their name when offering an annual return equivalent to 2.74 per cent at a time when inflation is running in excess of 4 per cent makes a mockery of the word saving.

Investing in no-risk products such as savings certificates, An Post savings bonds or deposit accounts merely trim the loss that would accrue by leaving the money under your mattress.

Only by assuming a degree of risk are you going to keep pace with inflation. Having said that, it is certainly possible to better than 2.74 per cent. A brief glance at the deposit rates on offer shows a number that are ahead of the savings certificate figure.

Northern Rock is offering 3.25 per cent on its demand deposit on sums over €1,000, while Anglo Irish is offering 3.35 on amounts in excess of €2,000 in its seven-day notice account. Leaving the money in a 12-month notice account will yield 3.5 per cent with the Irish Nationwide on sums above a certain size and EBS Building Society will give you 3.25 per cent with a six-month notice period for anything over €5,000.

As you can see, each option has different rules and applies to different sums but you can certainly get more than An Post is offering on those saving certificates.

Please send your queries to Dominic Coyle, Q&A, The Irish Times, D'Olier Street, Dublin 2 or e-mail to dcoyle@irish-times.ie. This column is a reader service and is not intended to replace professional advice. Due to the volume of mail, there may be a delay in answering queries. All suitable queries will be answered through the columns of the newspaper. No personal correspondence will be entered into.