5 grand into dc sipp before they are 18: what could it be worth by the tone they retire?

[Packageholiday]

Say on the 5 grand invested in classic index funds.

At an average 5% per year growth after fees, around £60k, assuming no ongoing contributions.
At 7% it would be £150k.

I’d assume somewhere between the two but hope for more because growth is not linear, if we have a decade like 2010-20, growth could be huge, you would expect 3 or 4 market crashes within half a century too.

Does that include compound

Yes, just google compound interest calculator and play around with different rates.

Historically, funds have doubled every 8-10 years.

Use the Rule of 72

So at a 6% return your £5k takes 72/6 = 12 years to double.

To double every 10 years would take a return of 7.2%

This includes compunding.

So 40 years at 7.2% means £5k becomes £10k which becomes £20k which becomes £40k which becomes £80k

If they don’t have earnings you can only contribute £2,880 per year which will get £700 tax relief.

My mother put, IIRC, £500/year for my kids into a pension from when they around school age until she died. Not sure what the underlying investments are but the amounts in there now, kids pushing 30, would buy a decent car.

Can't touch it until their mid fifties though.

Meant to say tax relief is £720

Yes use the rule of 72 and it will give you a forecast

@Bromptotoo

It's such a brilliant idea though.
Who knows what life will throw at any of us.
By the time they zone tp retirement age that's a wondeful little bonus.

I absolutely must do it this for my children, I think procrastinate is the enemy and once it's open it's there and they can also be encouraged to save teeny amounts into it

www.hl.co.uk/pensions/junior-sipp/junior-sipp-calculator

You can play around with numbers here