Small monthly savings plus time beat big intentions. See what a starting pot and a monthly contribution grow into at any interest rate — year by year.
Compounding means your returns earn returns. £200 a month at 5% for 10 years is £32,703 — you put in £25,000 and growth adds £7,703. Stretch the same habit to 25 years and the pot is about £122,583, of which growth is roughly £61,583: half the final value came from compounding, not from you.
Two honest warnings. First, these are smooth, assumed returns — real investments wobble, and a cash savings rate and stock-market returns are very different animals (this calculator doesn't know which you're modelling). Second, inflation quietly eats the real value: at 3% inflation, £32,703 in ten years buys roughly what £24,300 buys today.
Saving into an ISA shelters the growth from tax (2026/27 allowance £20,000). None of this is financial advice — it's arithmetic to help you plan.
At a 5% annual return, about £32,703 including a £1,000 starting pot — £25,000 of contributions and roughly £7,703 of growth. At 7% it would be about £36,627; at 3%, about £29,298.
Balance = principal × (1 + r)^t for a lump sum, with regular monthly contributions added as a series. This calculator compounds monthly, matching how most savings and investments actually accrue.
Roughly 72 divided by the rate: at 5% about 14.4 years, at 7% about 10.3 years, at 3% about 24 years. That is the "rule of 72" — a good mental shortcut.
Interest in a normal savings account counts as taxable income (with a Personal Savings Allowance of £1,000 for basic-rate taxpayers). Inside an ISA, growth and interest are tax-free — the ISA allowance is £20,000 a year.