Nowadays we're living longer, so we need more money than previous generations once did.

That's why many people choose to enhance their State entitlement through a scheme set up by their employer, or with a personal pension. The money is invested by their pension provider on their behalf with the aim of building up a more substantial sum for retirement.

Tax advantages:
For every £1 you put in, the Government adds 22p (for the 2006/07 tax year) for basic–rate taxpayers. Higher-rate taxpayers can also re-claim an additional 18p (for every £1) via their tax return. If you're offered a company scheme you may be able to benefit from your employer's payments.

Pensions invest in different types of investments, including investments based on stocks and shares, which carry different levels of risk. The value of your investment can fall as well as rise and you may get back less then you pay in.

If you have a personal pension but stop paying into it, you could actually lose much of whatever you've already paid. For example by stopping paying into your fund, the charges may reduce your fund, meaning you could lose out when you retire. 

3 Simple Steps to Starting a Pension Account
You decide to save for retirement with a personal pension plan
You choose a provider, type of pension and the age you would like to retire at.
You begin making payments: These payments, up to 100% of your relevant UK earnings, will receive tax relief, normally at your highest rate.