A Pension is a way to save for your retirement. Contributions made receive relief on Income Tax , although the exact relief depends on your level of income. The contributions in a pension are not accessible to you until you retire and not before the age of 50. In a pension you can put the money to work, either through savings, investments such as such shares or other alternative assets. For those just starting out making pension contributions Stakeholder pensions are cheapest most accessible.

The rule with saving for a pension is the sooner the better, because you could have over 40 years working, any contributions made now have more time to grow, giving you a bigger pension in retirement. However, because you cannot retrieve the money you have to consider other issues such as savings for a deposit for a house or rainy day funds.

Disclaimer:
The answers above are for guidance only and should not be acted upon without you receiving independent financial advice relevant to your circumstances. To find an IFA please go to http://www.unbiased.co.uk