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Compound interest calculator
What a starting amount plus a monthly contribution grows into over the years, and how much of it is growth rather than your own money.
For context: global stock markets have returned roughly 5 to 7% a year above inflation over the long run, with plenty of bad years along the way. Returns are not guaranteed.
After 20 years
£84,919
£49,000 put in · £35,919 of growth
Year 1■ growthYear 20
Inside a stocks and shares ISA, all of that growth is tax-free. Make sure the contributions are affordable first: check your money health.
Common questions
- How does compound interest work?
- Returns get added to your pot, and next period's returns are earned on the bigger pot. Early on the effect looks unimpressive; over decades it dominates. In the default example here (£1,000 plus £200 a month at 5% for 20 years), more than a third of the final pot is growth rather than money you paid in.
- What annual return should I assume?
- Long-run global stock market returns have averaged roughly 5 to 7% a year above inflation, but with large swings year to year. Cash savings rates are lower but guaranteed. Using 5% nominal is a common middle-ground assumption; try a lower number to see a cautious case.
- Does this account for inflation?
- No, figures are nominal. If you enter a return of about 2 to 3% below your expected investment return, the result approximates today's purchasing power instead.
- Why invest inside a stocks and shares ISA?
- Growth and withdrawals inside an ISA are tax-free, and you can put in up to £20,000 a year. Outside an ISA, dividends and capital gains above the allowances are taxed, which compounds against you over decades.
- Should I invest or pay off debt first?
- Expensive debt first, almost always: interest charged at 20%+ outruns any realistic investment return. The usual order is employer pension match, expensive debt, emergency fund, then investing.
Find the monthly amount you can actually spare with the Money Health Check.