Compound Interest Calculator (UK)
Small monthly contributions grow surprisingly fast when returns compound over decades. This calculator shows your future balance, how much you contributed, and how much of it is pure growth.
How to use this calculator
- Enter starting balance.
- Enter monthly contribution.
- Enter annual return rate.
- Enter time horizon.
- Your results appear instantly below and update as you change the numbers.
How this calculator works
Compounding means your returns earn returns. Each month you earn one-twelfth of the annual rate on your entire balance — including growth from previous months — and your contribution is added on top. The longer the horizon, the larger the share of your final balance that comes from growth rather than deposits, which is the core argument for starting early. Worked example: £100 a month at 5% for 10 years grows £12,000 of contributions into about £15,530; stretch that to 30 years and the same £36,000 of contributions grows to about £83,200 — growth outpaces your deposits. Inside an ISA or pension the growth is tax-free.
Frequently asked questions
What rate should I use for UK savings?
Cash savings are paying roughly 3–5% in 2026 (easy-access lower, fixed-rate bonds higher). A diversified stock portfolio has historically averaged 6–9% a year before inflation over long periods. Try 3%, 5% and 7% to see how sensitive your plan is to the rate.
Why does starting early matter so much?
Because compounding is exponential. Saving £100 a month for 30 years from age 25 beats saving £200 a month for 15 years from age 40, even though you contribute the same total — the extra 15 years of compounding on the early money is that powerful.
Is compound interest taxed in the UK?
Inside an ISA or pension, no. In a taxable savings account, interest above your personal savings allowance (£1,000 for basic-rate taxpayers, £500 for higher-rate) is taxed at your marginal rate. Outside an ISA, that's why the effective return is lower than the headline rate.
Disclaimer: Results are estimates for general information only and do not constitute financial, tax, or legal advice. Figures reflect the current tax year and may change. Always confirm current limits and consult a qualified professional before making decisions. Official figures: GOV.UK income tax rates · National Insurance · Stamp Duty Land Tax.