Once you’ve stripped away the jargon, pensions are quite simply a long term investment that helps you save for retirement. The money is collected together in a fund and the pension provider will invest this fund on your behalf in order to help it grow. You can get tax relief on the payments you make, and once you retire you can use your fund to buy an income (usually called an annuity) from a pension provider. This income will be paid to you on a regular basis. Tax rules may change in the future.
Pensions are specifically designed for you to make payments all through your working life, keeping your money invested, without access, until your selected retirement age. Even though there’s a risk that your fund can go down as well as up, pensions are still seen as one of the most suitable methods of saving for your financial future.