A pension scheme is a financial plan designed to provide individuals with income after they retire from work. It typically involves regular contributions made by employees, employers, or both during a person's working life. These contributions are invested to grow over time, ensuring that retirees have a source of income when they are no longer earning a salary. There are various types of pension schemes, including defined benefit plans, which guarantee a specific payout at retirement, and defined contribution plans, where the payout depends on the investment's performance. Understanding these schemes is essential for effective retirement planning and financial security.