A pension is a fund into which a sum of money is paid regularly, usually by an employer, and from which the employee receives regular payments after retirement.
Pensions work by taking a portion of your salary each month and investing it. The money is then used to provide you with an income when you retire.
There are many benefits to having a pension, including:
- A regular income in retirement
- Financial security
- Peace of mind
- Tax relief on your contributions
There are many different types of pensions, including:
- Defined benefit pensions
- Defined contribution pensions
- Personal pensions
- Workplace pensions
The amount you should contribute to your pension depends on a number of factors, including your age, salary, and retirement goals. A good rule of thumb is to contribute 10% of your salary each month.