£100 now...how much in 40 years?

buel10

Hi all.

I recently had a conversation with my 25 year old friend about how instead of putting their £100 towards a quick break away somewhere, just for a change, they should put it in their work-based pension. Now, I KNOW that the answer to my question is impossible to answer correctly but I'm not after an exact answer - just an approximation: If £100 (plus tax relief) was invested in one's pension now, given average growth, how much could this be worth in, say, 40 years' time?

Al.

Many insurance companies offer online tools - as a newbie, I can't post the link, but search for 'Standard Life retirement calculator'. There are many similar variants out there and that's most definitely not an endorsement for Standard Life!

PeacefulWaters

Using compounding growth over and above inflation over 40 years:

3%: £326
5%: £703

That's buying power at today's prices.

carter91

Rule of 72 is quite a good guide on doubling the original amount.

If you assume a growth rate after inflation of say 3%.
Then the original sum will double in 72/3 i.e 24years (to £200).
After another 24 yrs that £200 will double to £400.

So in c.48 yrs the £100 has increased to £400 if the investment it is in
grows at 3% in p.a. in real terms.