A pension is a “defined benefit plan” where a fixed sum is paid regularly to a person, or a “defined contribution plan” under which a fixed sum is invested and then becomes available at retirement age.

You save a little of your income regularly during your working life so that you can have an income in later life, when you want to work less or retire.

There are several types of pension schemes. Some may be run by your employer; others you can set up by yourself. When the time comes for you to start enjoying your pension, there will be several options available to you. These may include being able to take a tax-free cash sum and the added security of being able to receive a regular income.