When it comes to building retirement wealth, few tools come close to the power of a Self-Invested Personal Pension (SIPP). Beyond the tax advantages, SIPPs allow investors to tap into the wealth-building potential of the stock market. And with the right investing strategy, it’s possible to even retire early.
That’s terrific news for those getting a bit fed up with their job and want to quit working sooner rather than later.
So let’s say a 40-year-old today wants to quit work just as soon as they can access their SIPP at 57 in 2043 (assuming the age requirement doesn’t change from 2028 onwards). How much money could be accumulated by starting investing £500 a month from today?
Crunching the numbers
In 2025, the FTSE 100 delivered its strongest returns in over a decade, at over 25%. But sadly, that’s a bit of an outlier. And historically, the UK stock market’s generated closer to 8% annualised returns over the long run.
But even at 8%, a SIPP can grow substantially over 17 years. For someone paying the Basic rate of income tax, every £500 deposit will receive 20% tax relief courtesy of the government.
That means instead of £500, an investor will have £625 of investable capital each month. And investing that amount each month at an 8% rate of return will compound into £269,873 by 2043.
Following the 4% withdrawal rule, that’s enough to generate a retirement income of £10,795. Combine that with the £12,548 State Pension, and the total comes to £23,343 a year – more than enough to meet minimum retirement living standards even after stopping work early.
That’s certainly not bad, but by aiming for higher returns through stock picking, investors can potentially do much better.
Please note that tax treatment depends on the individual circumstances of each client and may be subject to change in future. The content in this article is provided for information purposes only. It is not intended to be, neither does it constitute, any form of tax advice. Readers are responsible for carrying out their own due diligence and for obtaining professional advice before making any investment decisions.
Maximising wealth
Instead of relying on simple index trackers, skilful investors can opt to buy shares of specific individual businesses. Why? Because by exclusively owning the best businesses, a portfolio can earn significantly better returns than 8%. And anyone who spotted the opportunity with Computacenter (LSE:CCC) 17 years ago, knows this firsthand.
Following a successful expansion into the US market as well as transitioning beyond just IT reselling to include higher margin value-added services, shareholders of this UK tech enterprise have earned a staggering 3,862% total return.
On a yearly basis, that’s the equivalent of a 24.2% average – enough to transform £625 a month into a £1.79m SIPP!
Still worth considering?
With a market-cap of £3.2bn in 2026, it’s unlikely that Computacenter shares will continue generating a 24.2% annualised return between now and 2043. But that doesn’t mean the growth story’s over.
Businesses worldwide are rapidly adopting artificial intelligence (AI) technologies, with hyperscaler data centres investing heavily in new infrastructure. That’s a tailwind Computacenter’s already been busy capitalising on, driving 32% growth in gross invoiced income in 2025 alone.
That’s certainly exciting, but it’s worth remembering that IT spending’s ultimately cyclical. The AI gold rush will eventually start to slow. And while businesses will undoubtedly continue to need IT-related support and services, cyclical downturns will surely put pressure on both Computacenter’s share price and dividend.
Nevertheless, with a superb track record of navigating through IT market downturns, investors may still want to consider this business further for their early-retirement SIPP portfolios.
