In addition there is a 5 per cent bid-offer spread which means that the value of your contribution immediately

In addition, there is a 5 per cent bid-offer spread, which means that the value of your contribution immediately depreciates by that amount – akin to buying a new car. A large slice of this goes towards the commissions it paid its salesman.The firm also levies monthly contributions fees, which collectively come to more than pounds 180 a year. The company applies a very high setting-up charge, which in effect wipes out a large part of your first and second year’s contributions. The reason for the seeming disparity between your contributions and the value of your pension to date lies in the way the company concerned, Merchant Investors, applies its charges. As you are not married, you should ensure that you have completed a death benefit nomination form so that your employer is in no doubt about whom the lump sum should be payable to on your death.Then there is the matter of your pension. He should be considering a pounds 100,000 policy, ideally pounds 150,000.

In the event of such an illness occurring, both you and Martin could repay the capital outstanding on your mortgage and the surplus could be used for any other purpose.You already have life cover through your work, but Martin does not. Next, you need to establish whether or not the term assurance policy that Martin has is written under trust for your benefit.There are two other points you need to consider under the heading of protection. She also wants to discuss how Jackson’s long-term financial needs could be met if something happened to her.The adviser: Roddy Kohn, principal of Kohn Cougar, a firm of independent financial advisers based in Bristol.The advice: As you have a child and are not married the most important step for you is to make a will so that in the event of either of your deaths any issues of inheritance are properly resolved.As an interim measure I suggest you obtain a cheap will from WH Smith and complete it until you and Martin get to see a solicitor. She has steadily increased contributions into the scheme as her earnings have risen and now pays pounds 2,080 gross into four separate plans with the same company.In addition, she also has an old rebate-only pension with a firm called Provident Mutual, now part of General Accident, from when she opted out of her state earnings-related pension, plus a new scheme with Lincoln National, into which her employers are paying a further 3 per cent of her salary which would otherwise be paid into her company scheme.The problem: Paula is worried by the fact that the value of the funds she has built up over the past eight years appears to be less than the contributions she has paid in.

Paula has the option of joining a company pension scheme but on the advice of an insurance salesman many years ago set up a personal pension instead with a company called Merchant Investors. She also has generous private health insurance options should she be forced to stop work permanently. Name: Paula Charlton

Date of birth: 20-09-1963
Occupation: Graphic artistBackground: Paula lives in London with her partner, Martin, with whom she has a young son, Jackson.Paula, who earns pounds 33,000, has life cover worth four times salary on death through her employer. How can that be? Because the company concerned devised a plan that sucked out most of the value of her contributions.Hundreds of thousands of others, many of them Independent readers, are likely to be in Paula’s position.Yesterday it was announced that some 11,000 people, out of more than 475,000 urgent cases, have been offered compensation by the companies concerned.If insurance companies want us to stop writing about this issue, they should compensate those affected by the mis-selling scandal, including Paula.. I didn’t.But no one who reads the story of Paula Charlton, our “financial makeover” candidate this week, can fail to be angered by this case.Here is a woman who was so keen to plan for her future that she set up a personal pension eight years ago, when aged 25.The result? Her savings are worth less today than the money she has paid in over all these years. With something fragile, like a woman’s dress, you might put tissue-paper in the sleeves.