A pension is a place you can put money aside for your retirement, which will be invested on your behalf. Any payments into your pension are called contributions – most people make these on a monthly basis, but there are also ways to transfer in larger lump sums.

When you pay into your pension, you get tax relief on your contributions. If you’re a basic rate taxpayer, that means you only spend 80p from every £1 you put in. If you have a limited company, contributions on behalf of the business are expenses, allowing you to reduce your corporation tax bill.

Once you reach retirement age, you can get your money in several ways. These include up to 25% of your fund tax free, regular or ad-hoc payments to suit your needs, although there will typically be income tax to pay, depending on your circumstances.