Talking about heaven and hell is never easy with children. Even heaven, which is the most wonderful place anyone could ever imagine (beyond what we can imagine), is scary because we have to die to get there and it is a great unknown. Purgatory and hell are much less appealing options. Yet, we do have a responsibility to teach out children about these realities. God has revealed them to us. We can't pretend that they don't exist. There are consequences for how we choose to live our life in this world, and while we trust in God's mercy, we also believe that He is just.
Mary Lou Rosien has a good way of teaching about hell which she describes in Catechist Know-How in Our Sunday Visitor (You need to scroll down the page to find the article): https://www.osvparish.com/ResourceLibrary/FaithatHome/TeachingCatholicKids/Article/tabid/393/itemId/527/A-Lively-Lent.aspx
We talked about what it would feel like to permanently 'lose' God. I
explained to them, that the pain would not fade, that time would not
heal that loss and that hell would be that intense loss forever!
They seemed to gain a new understanding of what hell might be like,
without the scary images that are often associated with it. It became an
idea that they could relate to and they expressed a healthy fear of the
loss of heaven though sin.
We then talked about how blessed we are to have the sacraments to bring
us back into a strong relationship with the Lord. We discussed Baptism,
Communion, Confirmation, Anointing of the Sick, and especially
Reconciliation as an avenue to Grace. We rejoiced at God's mercy and how
much He wants each of us to live with Him forever in heaven.