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For most people the main benefit is that employers make a contribution into pension and this is free money.
Matt101-
My missus has this - hers matches her contribs up to a percent.
Mine seems less good - they share 50% of their Employer NI savings:
"For instance, if you chose to sacrifice £100 per month the total amount paid into your pension scheme per month is £106.90. (£100.00 x 13.8% / 2 = £106.90)"
I guess that's not insubstantial if you're contributing a decent amount of time.
hippy
You pay income tax on your pension withdrawals if your total annual ‘non-savings, non-dividend’ income is more than your personal allowance – the amount every person is entitled to earn before they start paying income tax. For the 2023/24 tax year the standard personal allowance is £12,570.1
Your total annual non-savings, non-dividend income could include the State Pension, a private person or workplace pension, earnings from a job or self-employment, income from a rental property and any taxable benefits.
You’ll pay basic rate income tax at 20% on total annual non-savings, non-dividend income between £12,570 and £50,270. Above this threshold you pay a higher rate of 40% – and on income above £125,140, you’ll pay tax at 45%.1 Also, if your total income is greater than £100,000, then your personal allowance will be reduced by £1 for every £2 of income you earn over £100,000.
You save tax by paying into your pension but then cop it when it pays out. So, what's the benefit? If you live cheap you pay less tax overall?
Oh, there's a 25% tax-free lump sum rule? So, some of your pension is tax free?