(Disclosure: Canadian living in the UK) Pension contributions are restricted because they are tax-deferred. You avoid paying income tax on the money you put in

(Disclosure: Canadian living in the UK) Pension contributions are restricted because they are tax-deferred. You avoid paying income tax on the money you put in the pension. That money will also grow tax free, but you will pay normal income tax on it again when you take it out. The age limits on withdrawals are to incentivize long-term savings, I suppose. It's one way the government can incentivize savings, there definitely could be other ways. If you want to invest your after-tax earnings, you can do that however you please (including investing inside of a tax-free ISA).