Savings Calculator UK
A £1,000 lump sum plus £200/month at 4.5% AER grows to approximately £31,100 over 10 years, of which around £7,100 is pure interest. The longer you save and the higher the rate, the more compound interest does the heavy lifting. Use this calculator to model ISAs, savings accounts and regular deposit plans.
Calculation method: Compound growth projection. This tool runs a model on the figures you enter, so there is no official rate table behind the result.
Calculator
AER / annual compound rate. Cash ISAs: ~4 to 5%. Stocks & Shares ISA historical avg: ~7 to 10%.
Final Balance after 10 years
£31,807
Total Contributions
£25,000
Interest Earned
£6,807
Return on Contributions
27.2%
Year-by-year breakdown▼
| Year | Contributions | Interest | Balance |
|---|---|---|---|
| Year 1 | £3,400 | £96 | £3,496 |
| Year 2 | £5,800 | £307 | £6,107 |
| Year 3 | £8,200 | £637 | £8,837 |
| Year 4 | £10,600 | £1,094 | £11,694 |
| Year 5 | £13,000 | £1,681 | £14,681 |
| Year 6 | £15,400 | £2,405 | £17,805 |
| Year 7 | £17,800 | £3,274 | £21,074 |
| Year 8 | £20,200 | £4,292 | £24,492 |
| Year 9 | £22,600 | £5,467 | £28,067 |
| Year 10 | £25,000 | £6,807 | £31,807 |
With UK inflation averaging 2 to 3%, your real return is lower than the nominal rate shown. A 5% return with 3% inflation gives only ~2% real growth in purchasing power.
These insights are generated based on your inputs and general UK financial guidelines. They do not constitute personal financial advice. Always consult a qualified accountant or FCA-regulated adviser before making financial decisions.
What this calculation assumes
Balances grow by A = P(1 + r/n)^(nt), with contributions added at the start of each period where the calculator offers them. Growth rates you enter are assumptions about the future, not forecasts.
- The growth or interest rate you enter is constant for the whole period
- Contributions continue unchanged unless you change them
- Charges, platform fees and tax on returns are excluded unless the page states otherwise
- Figures are nominal unless the page explicitly shows a real, inflation-adjusted result
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How Savings Calculator UK Works
How savings compound over time
Each period your interest is calculated on the entire balance, including all previously earned interest. This is compound interest. Monthly compounding grows money faster than annual compounding because interest is added 12 times per year.
AER vs gross rate
Always compare savings accounts using the AER (Annual Equivalent Rate). It accounts for compounding frequency so you can compare monthly vs annual interest accounts on a like-for-like basis. The AER is what this calculator uses.
Tax on savings interest
The Personal Savings Allowance for 2026/27 remains £1,000 for basic rate taxpayers and £500 for higher rate taxpayers. Note: from April 2027, savings income will be taxed at rates 2 percentage points higher than the current main rates. Cash ISAs provide a tax-free wrapper, ideal if you're a higher earner or accumulating significant interest.
Frequently Asked Questions
As of 2026/27, easy-access savings accounts and cash ISAs are offering 4-5% AER. Fixed-rate bonds can offer up to 5.5%+ for locking away money. Always check the AER for like-for-like comparisons.
ISAs shelter interest from income tax. For basic-rate taxpayers with the £1,000 Personal Savings Allowance, a standard account may be fine. Higher-rate taxpayers (£500 allowance) and additional-rate taxpayers (£0) benefit most from an ISA wrapper.
A common rule is 20% of take-home pay (50/30/20 budget). For retirement, many advisers suggest saving half your age as a percentage, so a 30-year-old would aim for 15% of income. Even £50/month consistently makes a meaningful difference over decades.
The annual ISA allowance for 2026/27 is £20,000 per person. This can be split across Cash ISA, Stocks & Shares ISA, Innovative Finance ISA, and Lifetime ISA (capped at £4,000 per year for LISA).
No. The Personal Savings Allowance remains £1,000 for basic rate taxpayers and £500 for higher rate taxpayers in 2026/27. However, from April 2027, savings income will be taxed at rates 2 percentage points higher than the current main rates, making ISAs even more valuable.
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Related Guides
Tax on Savings Interest UK 2026/27
Personal Savings Allowance limits, starting rate for savings, and how HMRC collects tax on interest.
Read guideISA Guide UK 2026/27: Allowance, Types and Rules Explained
Your £20,000 ISA allowance, the four ISA types, Lifetime ISA rules, transfers, and paying into more than one.
Read guideCompound Interest Explained: How Your Money Grows
How compound interest works, the Rule of 72, and why starting early matters so much.
Read guideCompound Interest: How to Build Long-Term Wealth in the UK
The Rule of 72, ISA compounding, monthly contributions and the mistakes that kill long-term growth.
Read guideUK Inflation: How Rising Prices Are Eroding Your Savings
With elevated inflation, cash savings lose real value. We explain how to calculate real returns.
Read guideWas this useful?
Sources and method
This calculator has no external rate table behind it. The result comes from the figures you enter and the model described in our methodology.
Method: Compound growth projection.
Spotted a figure that looks wrong? Report a correction and we will check it against the source above.
Further reading
Background references used while writing this page. The sources behind the calculated figures are listed above.
Disclaimer: This calculator provides estimates based on standard HMRC rates for 2026/27. Results may vary based on individual circumstances. This is not financial advice. Always consult a qualified accountant or CIMA-qualified financial adviser for personal tax matters.