🟩 Why Do Pensions Exist?

Pensions exist to help people build financial security for their retirement years. With life expectancy increasing, many people may spend 20–30 years in retirement, making it essential to have a reliable income when employment stops.

🟩 How Do Pensions Work?

You, your employer, and sometimes the government make contributions into your pension. These funds are invested in various markets aiming to grow over time. Tax relief boosts your contributions, making pensions one of the most tax-efficient ways to save.

🟩 Types of Pensions:

• State Pension — provided by the government based on your National Insurance record.

• Workplace Pension — arranged by your employer, often with employer contributions alongside your own.

• Private Pension — arranged individually if you're self-employed or want additional savings beyond workplace schemes.

🟩 When Can You Access Your Pension?

Currently, most private pensions can be accessed from age 55 (rising to 57 from 2028), although the State Pension age is different and set by government rules. Accessing pensions earlier may come with limits or penalties.

🟩 The Importance of Starting Early

Starting early allows your pension savings to benefit from compound growth over many years. Even small regular contributions made early on can build significant retirement funds thanks to long-term investment returns.