A pension contribution is a payment that is made into a pension fund by an employee and normally taken at source from their salary or wage.
Each salary period a percentage of your salary is invested in a pension fund which accumulates over the years of your working life to result in a sum of money that will pay you a pension each month in retirement.
The value of each contribution and the way in which it is invested will add up to whether you have a strong enough pension plan.
Pension contributions are supported by the government, meaning that they are subject to tax relief. This tax relief differs depending on your rate of income tax.
Higher rate: Every €100 invested only costs €60 in reality (free €40 from the government)
Standard rate: Every €100 invested only costs €80 in reality (free €20 from the government)