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We all know how important it is to save as much as we can for the future. You never know when you might need to access your rainy day or emergency fund. 

Saving for retirement is also vitally important. 

Fortunately, the government helps us to save for retirement by providing some generous tax breaks. These tax breaks are designed as an incentive to save. 

Part of the justification for this incentive is that pensions can be seen as deferred pay. We save some of our income now, rather than spending it, to have income (or pension) later on in life.