It makes sense to put some money away for when you’re older – and that’s what pension schemes help you do.
The definition of a pension scheme is it’s a type of long-term savings plan. And it’s a tax-efficient way to save money during your working life.
You save some of your income regularly during your working life. This gives you an income in later life, when you want to work less or retire. That’s the meaning of pension – security when you’re older.
There are several types of pension schemes. Some might be run by your employer, others you can set up by yourself.
Saving into one scheme doesn’t mean you can’t save into another, or use other tax-efficient savings plans – for example, ISAs.
When the time comes for you to start enjoying your pension – you’ll have several options. These might include being able to take a tax-free lump sum, and the added security of being able to receive a regular income.