One of our team pointed out an article in The Sunday Times, written by the wonderful freelance journalist Holly Black, where she wrote about a Hertfordshire couple who had set up a pension for their grandchild at birth and then gave it to him as an 18th birthday present. The teenager was flabbergasted to be told that they had saved £118,000 in a pension and even more amazed that by the time he is 60 his retirement pot could reach a £1m without him contributing another penny! (Based on a growth rate of 5.1%).
The grandparents had contributed the maximum permitted of £2880 per year, making it £51,840 over the 18 years, with the government topping it up by £12,960 through tax relief.
So, start saving early and see the benefits of compound interest, something we at Lyndhurst have been encouraging our clients to do for the last twenty six years.