A defined contribution pension is a type of pension scheme in which the benefits you receive in retirement are based on the amount of money that has been paid into your pension account, as well as the performance of the investments made with those contributions.

In a defined contribution pension scheme, both you and your employer contribute to your pension account on a regular basis, usually through deductions from your salary. The contributions are then invested in a range of assets, such as stocks, bonds, and property, with the aim of generating growth over time.

Unlike a defined benefit pension, which guarantees a specific income in retirement, the final value of your pension in a defined contribution scheme is not known in advance. The amount you receive will depend on how much has been paid in, how well the investments have performed, and any charges or fees that may have been deducted from your account.

When you reach retirement age, you can use the accumulated funds in your pension account to purchase an annuity, which will provide a regular income for the rest of your life, or you can choose to withdraw the money as a lump sum or in smaller amounts over time.

Overall, a defined contribution pension gives you greater flexibility and control over your retirement savings, but also carries more risk and responsibility for managing your investments effectively.