A pension is a pot of cash that you, and your employer, can pay into – which you get tax relief on – as a way of saving up for your retirement.
It is a tax-efficient way to put money aside for later in life, to provide income for when you retire. It is best to put in as much as possible, as early as possible.
Depending on the type of pension you have, you and your employer can pay into it. The government also ‘contributes’ to your pension in the form of tax relief.
Once you turn 55 (expected to rise to 57 in 2028) or retire, you have a number of options for how you choose to take your pension income.