pensions and how they work

[filthiestfis]

Pardon my ignorance but can someone explain to me how pensions are worked out? Is it the total tax that you pay in your job that is paid back to you upon retirement with added interest? How do they work it out?

[Ethel]

Pensions are calculated on your National Insurance contributions.

The contributions you make now pay the pensions of people who are now retired, and when you retire you will be supported by the workforce.

Income tax has nothing to do with it.

If you die before pension age, your pension is lost. If you live to be 110, your pension cannot run out after x amount of years.

http://www.thepensionservice.gov.uk/atoz/atozd etailed/retirement.asp