Pensions are a way of saving towards retirement where the taxman will add money for you as well as allowing tax efficient growth.

Unlike ISAs every £100 you pay the taxman adds £28.20 immediately, higher rate taxpayers can claim another £23.08 when completing their tax return at the end of the year. That's more than 28% increase and almost 67% increase for high rate taxpayers on the net cost*. Making this one of the most tax-efficient ways of saving.

You pay contributions less an amount equal to basic rate tax relief, the insurance company will claim this back for you from the Inland Revenue and add it to your plan, together with any amount you have paid. This is referred to as making contributions net of basic rate tax.

* net cost for a higher rate taxpayer is £76.92, therefore total tax relief is 67% of the net cost to you. This is based on our understanding of current law and tax practice.