Home Business News Luke Littler might consider investing his earnings to make his money work smarter

Luke Littler might consider investing his earnings to make his money work smarter

by LLB Finance Reporter
6th Jan 24 4:40 pm

Compare and Invest Founder and CEO Bella Caridade-Ferreira offers this suggestion, 16-year-old Luke Littler earned £200k coming second in the Darts Championship.

The tax man will take £83.7k of that leaving him with just £116.3k.

As Luke is very young, he can make his money work harder for him until he retires. If Luke invested his £116.3k for 50 years, his money would grow to a whopping £2.1m over 50 years (growth rate of 6%)

As the calculations below show, the longer you are in the market, the greater the growth.

Seven tips to get your Self Assessment tax return right

“However, if Luke put 60k into a pension (the maximum annual contribution), he could reduce his tax to just £58k, giving him £143.3k to invest. That’s because the Government gives you tax relief on annual pension contributions of up to £60k, essentially cashback of £27k for Luke.)

“The £27k difference is small, but over time it adds up. Over 50 years, it means that Luke’s investment more than doubles. But even over 25 years, the 27K earns him a further £390k. The moral of the story is therefore to invest as much as you can for as long as you can.”

Amount interest rate years final amount

£116,300 6% 10 £181,575

£116,300 6% 25 £461,210

£116,300 6% 50 £2,142,264

£143,300 6% 10 £229,130

£143,300 6% 25 £850,780

£143,300 6% 50 £5,097,297

Note: Calculations have been run based on a standard 6% annual growth. Potential investment returns would normally vary year on year and the ultimate results could be lower or higher than the sums shown.

Compare and Invest is the go-to source for unbiased and comprehensive information on investment platforms to help you navigate the complex world of investment, whether you’re an experienced investor or a beginner.

Leave a Comment

You may also like


Sign up to our daily news alerts

[ms-form id=1]