Compound interest calculator

How does this compound interest calculator work?

It grows a starting amount and a monthly contribution at a true annual rate, minus fees, month by month, and shows the result both as the figure a statement would show and as what that figure would buy in today's money.

The Future £ / Today's £ toggle is the honest part. Future pounds are the number a statement would show in the final year; today's pounds are what that statement would buy after inflation at the rate in the assumptions, 2.5% a year unless you change it. Long projections look dramatically different through that lens, and both numbers are always one tap apart. Everything runs in your browser and nothing you type leaves it. The share button carries your scenario in the link, and the embed at the bottom of the page puts the calculator on your own site.

What could the default example grow to?

£10,000 to start and £200 a month at 5% a year reaches £107,694 after 20 years. You pay in £58,000; growth adds £49,694, almost as much as you did.

The shape matters as much as the total. In the first ten years growth adds £13,162; in the last five alone it adds £21,940. Compounding is back-loaded, so a projection that looks unremarkable at year ten is not a projection that has failed, and stopping early forfeits the years that were about to do the most work. It is also why the compounding method matters: a calculator that divides 5% by twelve and compounds that each month is really assuming 5.1% a year, which turns the same inputs into £109,333 - £1,639 that was never going to arrive.

How much does compound interest grow money over time?

At 5% money doubles roughly every 14 years; at 7% every 10. Over forty years the default £10,000 plus £200 a month becomes £366,905 at 5% and £644,053 at 7%, from £106,000 paid in.

Read the table down a column and the acceleration is obvious: at 5% the pot gains about £20,836 between years five and ten, and £55,285 between years twenty-five and thirty, for the same £12,000 of contributions. Read it across a row and the rate looks less decisive than it is talked about: over ten years the difference between 3% and 7% is £12,553, over forty it is £427,995. Time is the lever you control; the rate is the one you mostly do not. The old rule of 72 - divide 72 by the rate for the doubling time - gives 14 years at 5%, close enough to the exact 14.2 to be useful in your head.

Pension compound interest: what tax relief and an employer add

The same £200 a month from your take-home becomes £250 in a pension for a basic-rate taxpayer and £333 for a higher-rate one, before a penny of growth. Over 30 years at 5% that is the difference between £163,075 in an ISA and £203,844 or £271,792 in a pension.

The pension advantage is not a better growth rate; it is a bigger starting number, and compounding then multiplies the difference. Relief at source adds basic-rate tax back automatically, so £200 from your pay becomes £250 in the fund. A higher-rate taxpayer - anyone earning over £50,270 in 2026/27 outside Scotland - claims the other 20% through a tax return or tax code, which takes the true cost of £333 in the fund down to £200. That relief is the reason the SIPP vs ISA guide comes down on the pension side for most higher-rate savers, and why the Lifetime ISA vs SIPP guide is a closer call for basic-rate ones, since the Lifetime ISA's 25% bonus matches basic-rate relief and the money comes out tax free.

An employer contribution is the bigger multiplier still, because it is money that never came from you. Under automatic enrolment a workplace pension takes at least 8% of qualifying earnings, with the employer paying at least 3%. On the £39,039 median full-time salary (ONS, April 2025) that is £219 a month going in, of which the employer pays £82 and you pay £109 from take-home after relief. Over 30 years at 5% the minimum alone compounds to £178,290 - about £84,998 in today's money - against £111,431 if the employer's share were not there. Set the monthly slider to the total going in, including the employer's share and the tax relief, not to what leaves your pay, or the calculator will undersell your pension by more than a third.

Why does starting early matter more than saving more?

Because the early pounds compound the longest. £200 a month from 25 reaches £331,928 by 67 at 5%; the same £200 from 35 reaches £184,822 and from 45 only £94,512. Catching up from 45 takes £702 a month.

The 25-year-old pays in £100,800 over 42 years; the 35-year-old would have to pay £137,856 over 32 to end in the same place, and the 45-year-old £185,328 over 22. Ten years of delay costs more than ten years of contributions, because the missing decade was the one whose growth had longest to compound. None of this is an argument against starting at 45 - the table shows £94,512 from £200 a month, which is not nothing - but it is the arithmetic behind every piece of advice to start now with whatever you have. The retirement age calculator turns the same idea into an age: it shows how much sooner work becomes optional for every year of saving you add at the front.

What do fees cost over 30 years?

Compounding works on charges too. Take Leo, the 30-year-old in the worked examples below: £300 a month for 30 years at 7% grows to £350,836 with no fees and £292,354 if 1% a year goes in charges: £58,482, or about 16 years of those contributions, for nothing you would notice on a statement.

A fee looks small because it is quoted against the whole pot, but it is really a share of the growth: at 7% a year, a 1% charge takes a seventh of every year's return, and that seventh would itself have compounded for the rest of the term. Moving an old pension from 1% to 0.4% costs nothing in lifestyle and is the cheapest lever on this page. Enter your own fund's figure in the assumptions and compare; then read what the same tenths of a percent do to the age you can stop in the retirement age calculator, where they are worth about two years of retirement for the default saver.

What do rising contributions add?

A lot, for increases you would barely feel. Leo's £300 a month reaches £350,836 held flat; raised 3% a year, £309 in year two and so on, it reaches £481,438.

This is the quiet advantage of a workplace pension over a fixed direct debit: a contribution set as a percentage of salary rises with every pay rise without a decision. A fixed £300 a month, by contrast, buys a little less every year and shrinks as a share of your income. If you save outside a pension, the equivalent habit is to raise the standing order by inflation or by half of every pay rise, and the contribution increase setting shows what that habit is worth. The disposable income calculator works out how much room a pay rise actually leaves once tax and National Insurance have taken their share.

Future pounds or today's money?

Both, always. £107,694 in 20 years buys what £65,722 buys today at 2.5% inflation, and what £49,150 buys today at 4%. The headline is real; it just describes a smaller life than it sounds.

Most compound interest calculators stop at the big future number. That is not wrong, but it is why so many people arrive at retirement with a pot that looked enormous on a projection twenty years earlier and now buys a modest income. The Today's £ view deflates every point on the chart, including the contributions, so the gap between the two lines is real growth in purchasing power. Plan in today's money and the numbers connect to the life you actually know: our guides to how much you need to retire and to whether £500,000 is enough are written that way, and the retirement age calculator is built on it.

Worked examples: three savers

Three plans, each one the calculator above will reproduce from the inputs given. Set the same sliders and you will see the same chart.

Where does this fit in a retirement plan?

This page answers "what could my saving become?". The rest of the plan is what that pot has to do, and the other calculators on this site take it from here.

• When does the pot make work optional? The retirement age calculator runs the same compounding forward from your age, then simulates retirement month by month with the State Pension counted properly, and returns the earliest age the plan works.
• How long will it last? The pension drawdown calculator turns a pot into an income and an age it runs out, which is compounding in reverse: withdrawals compete with growth instead of adding to it.
• How much can you actually put in? The disposable income calculator works the monthly figure out from your salary and essential bills, with 2026/27 tax and National Insurance.
• What size of pot is the target? Our guide to how much you need to retire prices the Pensions UK living standards, and the pot-size guides from £100,000 to £1.5 million show what each one buys.

What this calculator leaves out

It models one steady growth rate, one contribution pattern and one fee, with no tax on the way in or out. Each of these can move the real answer.

• Tax on the way out. Pension withdrawals above the 25% tax-free share are taxed as income, and interest and dividends outside an ISA or pension are taxable above the allowances. The wrapper table above shows the way in; the drawdown calculator's guide has the 2026/27 figures for the way out.
• Contribution limits. Your own pension contributions get tax relief up to your earnings, and total contributions including your employer's are capped by the £60,000 annual allowance, which tapers for the highest earners; ISAs take £20,000 a year, which is £1,667 a month, so almost every scenario on this page fits inside one; a Lifetime ISA takes £4,000 of that.
• Sequence of returns. Real markets do not return 5% every year. The order of good and bad years barely matters while you are paying in, and matters enormously once you start drawing out, which is why the drawdown guide spends so long on it.
• Inflation on the contributions. In the Future £ view a fixed monthly amount is worth a little less every year. The contribution increase setting is the fix: set it to your expected pay growth and the plan keeps pace.
• Employer contributions and relief. The calculator takes the monthly figure you give it. In a pension that should be the gross amount going in, including the employer's share and tax relief, not what leaves your pay.

How to use the result