But you may still have the feeling that you have been running to stand still. The problem is annuity rates, which have been in almost continuous decline since the start of the decade. The result is people have needed more money to buy a given level of pension. There are two reasons and neither will disappear. For the foreseeable future, therefore, things can only get worse. The first is the decline in long-term interest rates, which has been a feature of the market since the early 1990s.

The second is longevity. Five years ago, standard life-expectancy tables showed men aged 60 could expect to live on average for another 16 years and four months. Today, it is 17 years, 10 months. That means rates must fall because annuity payments must last longer.

So far, so bad, but the problem has another wrinkle. The conventional advice to anybody saving in a money-purchase scheme (which means all personal pensions, and many company schemes, too, although not ones providing a pension linked to final salary) has always been to switch progressively from equity investments to cash over the five years leading up to retirement. The reason is that it has been seen as too risky to keep your pension fund in equities as it would be vulnerable to a market crash. But anybody who followed this cautious advice has doubly lost out because they will have enjoyed little growth (just 12 per cent over the past three years in the average pension cash fund). So what is the answer? There is no perfect solution, but thereare three possibilities that can mitigate the problem. You will need advice - and preferably independent specialist advice.

But many independent advisers are worried because people are not being made aware of the risks of staying in the equity market, and because they use the scheme to draw as high an income as possible. If they take out more than the amount by which the underlying fund has grown then they are eating into their capital. In a nutshell, income drawdown is best for people who have plenty of cash to play with - ideally, a pension fund of 200,000 or more - and who can afford to start on a relatively low level of income. With staggered vesting, or phased retirement, you take your pension policies in segments, cashing them in over the years and treating your tax-free cash entitlement from each policy as the first part of that year’s income. This way you avoid the risk of cashing in the lot when markets are low and it means you can keep more of your pension fund invested in equities for longer.Staggered or phased retirement could suit self-employed people who do not retire overnight but wind down gradually. Equity-linked annuities come in two forms: with-profits or unit-linked. These link retirement income to the returns made by the fund in which they are invested. As long as the fund grows, your income should grow, too. There is a caveat: the schemes let you anticipate a future level of growth and the higher the level anticipated, the higher your immediate starting income. However, if your anticipated level of growth is not reached, then income will fall.

New music CD format runs into trouble

Super CDs that promise to bring the sound of a concert hall into living rooms has run into trouble over a format battle, reports The Sunday Times.

The audio CD, launched in Japan in late 1982, is one of the most successful consumer-electronics formats with more than 10 billion sold worldwide. But sales have since taken a tumble and the music and consumer-electronics industry hopes animproved disc will revitalise the market. Several years ago, the music industry compiled a wish list of features a new audio format should offer.

These included better quality, multi-channel sound, copying protection and anti-piracy systems, plus full compatibility with today’s CDs and players. Sony and Philips, which invented the music CD, have developed the Super Audio CD (SACD). Although an SACD is the same size as a conventional CD, it can store eight times the data.The SACD format uses a system called direct stream digital to process the audio signal,which inventors say gives better sound quality than CDs. An SACD offers up to 74 minutes of high-quality sound through two or six channels.

The SACD format also uses a disc consisting of two recording layers on the same side. One layer stores CD-quality sound, which can be played on an ordinary CD player, and the second holds the higher-quality audio, which can be heard only on a new generation of SACD players. Music companies can also add multimediamaterial to an SACD title, in the form of pictures, text and graphics, which could be viewed on a PC or television.

In March, Sony and Philips began offering SACD licences, and announced that the first players and discs would be launched in Japan next spring. The format, however, faces a challenge from a new audio version of the digital video disc (DVD). DVD players, which play films stored on a CD-size disc, are already on sale, and there are plans for a DVD audio disc that will offer much better sound quality than today’s CDs. Ordinary CDs use a digital audio system called pulse-code modulation that samples or measures an audio signal 44,100 times per second (44.1 KHz).

DVD audio offers a range of sampling rates that extend up to 192 KHz, and the digital word length can be up to 24 bits. DVD audio has been designed by about 40 companies from the consumer-electronics and computer industries -- members include Intel, IBM and C-Cube. Like SACD, DVD audio discs will also offer multi-channel sound, andmultimedia material, but the systems are incompatible. The first version of the DVD audio standard is being released in September, and the first players and discs will be released in Japan at about the same time as SACD.