Yeah, that's how it works. I'm an expat so I'm not entitled to a proper pension and have to put it into a long-term savings account instead. That means that I get taxed on it before it goes into the pension but when I retire, I'll be able to take it out tax free. That sounds good, but it ultimately means I pay more tax because when I retire, I'm unlikely to be hitting the same tax bracket that I'm in now, so getting a tax saving now would be more beneficial. With a real pension you get that income tax free when you were working, and then pay tax on it when you retire instead, which for most people means they pay a lower rate of tax than they would have when they were working.