Over the years Jerry has worked for a number of shipping companies. His employment situation is volatile and it has been difficult for him to make proper provision for retirement. He earns pounds 12,600 a year and feels that his income prospects are likely to be pounds 14,000 at best. He is single, with no dependents, and is a smoker.

Jerry has preserved pension benefits from a previous employment and is paying pounds 80 a month into a personal pension. He is uncertain as to what pension he may be entitled to when he retires, probably at age 60.

He is happy with his other financial arrangements, although he is interested in a second opinion to give him peace of mind.

The adviser: Keith Owen, an independent financial adviser at RK Harrison Financial Services, Bradninch Court, Castle Street, Exeter (0139-249 5014).

The advice: Jerry was a member of the Merchant Navy Ratings Pension Fund for about 15 years, up to April 1994, when he ceased employment with P&O. Since then he has made his own pension provision.

In July 1992, he took out a Free Standing Additional Voluntary Contribution pension policy with Equity & Law for pounds 60 net per month to help top up his pension benefits. When he left P&O in 1994, the policy was made paid- up. Earlier this year he converted the policy to a personal pension and has been paying pounds 80 per month net into it since July.

Jerry considers himself to be a cautious investor, and therefore the choice of the with-profit fund within the policy seems appropriate. However, if he is able to increase the size of his pension contributions, he could consider a slightly more speculative stance with the additional payments. A managed fund is likely to provide better returns than a with-profit fund, although he should ensure that before he reaches 60 he locks in gains made up to that time.

Jerry has recently obtained a Retirement Pensions Forecast from the Benefits Agency by completing and returning form BRI9. The good news is that he is likely to receive the full basic state pension from age 65. The bad news is that the basic state pension has been falling further behind average earnings each year since the mid 1980s.

Jerry also will receive an additional pension under the State Earnings Related Pension Scheme and the old Graduated Scheme. This is worth pounds 1,945 per annum. His basic state pension, in today's terms, is likely to be pounds 3,363 per annum, the present rate for a single person. His total state pension should therefore be pounds 5,308 per annum, increasing in line with inflation.

The last annual statement Jerry received from the Merchant Navy Scheme shows that he has a preserved pension of pounds 3,126 per annum from age 62, the scheme's normal retirement date. This will increase up to retirement age, part of it - the Guaranteed Minimum Pension - by 7 per cent per annum and the rest by the rate of inflation - up to a maximum of 5 per cent per annum.

If Jerry took the benefits from 60 rather than 62, this would reduce the pension by 9.79 per cent. The figure of pounds 3,126 per annum would therefore be reduced to pounds 2,816.

His Equity & Law pension policy is estimated to provide a pension from age 60 of pounds 3,109 per annum. This, however, assumes the underlying investments grow by 9 per cent per annum.

In today's terms, pensions of pounds 5,308, pounds 2,816 and pounds 1,867 - from the state, the Merchant Navy scheme and Equity & Law respectively - would total pounds 9,991 per annum. This is three-quarters of his present earnings. However his state pension, which represents more than half of his total prospective pension, will not be payable until age 65, five years after he is likely to retire.

As he has no investment capital, Jerry should build up funds to bridge the pension gap between ages 60 and 65.

I suggest a PEP with Perpetual which - being the biggest player in the PEP market - has excellent administrative systems which should cope with the change to an ISA next year. Its High Income Fund, which has 13 per cent in fixed interest stocks and is the top trust in its sector over the past five years, may suit Jerry's more cautious approach .

Jerry has a mortgage of pounds 53,700 with Cheltenham & Gloucester, backed by three endowment policies, two with Royal & Sun Alliance and one with Friends Provident. He has queried whether the Royal & Sun Alliance policies will reach their share of the anticipated amounts at maturity of about pounds 48,000.

It appears that an investment growth rate of between 8 and 9 per cent per annum will be needed to produce the pounds 48,000 from these two policies when they mature in 2008 and 2009. While future investment performance is not guaranteed, I would expect that there will be no shortfall when the policies mature.

Jerry has life cover provided under the three endowment policies which, being single and with no dependents, he does not really need. He might wish to consider a critical illness policy that would pay off the mortgage if he is diagnosed with a life-threatening or crippling illness. A policy for a sum assured of pounds 53,700 over an 11-year term would cost a smoker of Jerry's age pounds 54,752 per month from Scottish Provident.

Jerry has a Royal & Sun Alliance sickness and accident policy that he pays a monthly premium of pounds 39 on. It will pay out a monthly benefit of pounds 800 in the event of sickness or accident preventing him from working, after a deferred period of 15 days. The drawback with this type of policy is that the benefit is payable for a maximum period of 12 months and therefore does not provide Jerry with long-term protection.

Income protection or permanent health insurance would provide cover up to Jerry's retirement. Norwich Union will provide cover of pounds 525 per month - 50 per cent of his gross earnings - for a monthly premium of pounds 28.03 with a deferred period of 13 weeks, or pounds 56.57 with a deferred period of four weeks. The policy would provide cover up to the age of 60.

Jerry could consider cancelling the sickness and accident policy to obtain the better coverage given by a permanent health insurance policy, with the savings largely defraying the costs.