What inflation rate should I use?

The Bank of England targets 2% inflation. Historical UK average is roughly 2.5–3%. For conservative planning, 2.5–3% is a reasonable assumption. The calculator lets you adjust this to explore different scenarios.

Are the results shown in today's money?

When you set an inflation rate in Advanced Settings, yes — the final balance shown represents purchasing power equivalent to today's pounds. Without inflation set, results are nominal (future pounds).

How is compound interest different from simple interest?

Simple interest is calculated only on your original principal. Compound interest is calculated on your principal plus all previously earned interest — so your returns generate their own returns. Over long periods, this creates exponential growth.

What rate of return should I expect?

It depends on the investment. Cash ISAs might offer 4–5%, while a diversified stock portfolio has historically averaged 7–10% annually over long periods. Higher returns typically come with higher risk. This calculator lets you explore different scenarios.

How often should interest compound?

More frequent compounding (monthly or daily vs yearly) gives slightly better results, but the difference is usually small. Most savings accounts compound daily, while investments like index funds compound based on market returns.

What real return should I expect?

If you expect 7% nominal returns and 2.5% inflation, your real return is approximately 4.5%. Over 25 years, this still creates substantial compound growth — just less dramatic than nominal figures suggest.

Real Returns

Inflation-Adjusted
Compound Calculator

See how small monthly savings can grow into life-changing money

See what your investments are really worth in today's money. This calculator adjusts for inflation so you can plan with purchasing power, not just nominal figures.

Free to useNo signup requiredUsed by UK investors

1Calculate

2Understand

3Take action

Starting amount

£0£20k£200k

Monthly contribution

£0£1k£5k

Expected annual return

Time horizon

yrs

Final Balance

£110,991

After 25 years

You Put In

£60,500

Your own money

Interest Earned

£50,491

Earned passively

You could reach £110,991 — investing tax-free can help you get there

Your money vs compound growth45% from interest

ContributionsCompound interest

To reach £110,991, most UK investors use a Stocks & Shares ISA to invest £200/month tax-free.

Returns depend on the underlying investments and are not guaranteed.

Your £200/month fits within the £20,000 ISA allowance

All growth inside an ISA is tax-free. Start from as little as £1.

Capital at risk when investing

Thousands of UK investors use this calculator monthly

Start investing tax-free ↓

Compare scenarios

See how different choices change your outcome

Growth Over Time

Quick Scenarios

Compounding frequency

Inflation rate

Yearly contribution increase

Inflation adjusts your final balance to show purchasing power in today's money. Contribution increase grows your monthly payment each year.

Your Personalised Insights

Your money earns ~£6/day in interest — that's £50,491 earned while you sleep.
Saving just £50 more per month would add £94,390 to your final balance — that's £15,000 invested for £94,390 extra.
5 more years would add £137,061 — nearly 123% more, showing how powerful time is.
Starting 5 years earlier would add £4,786 to your final balance. Every year you wait costs real money.Start investing now →
Consistency beats timing — investing £200/month for 25 years matters more than picking the perfect moment to start.
At your current plan, you reach £100k in 24 years. That's a real milestone — and it compounds from there.Start building towards it →
53% of your total wealth is built in the final 10 years. Patience is everything.

Next Steps

Affiliate disclosure: Some links below are affiliate links. We may earn a commission at no extra cost to you if you sign up. This does not influence which platforms are shown or how they are described.

Explore popular UK investment platforms

Many UK investors hold investments in a stocks & shares ISA for tax efficiency. Returns depend on the investments held within the ISA and are not guaranteed. Here are popular platforms available to UK investors.

FCA regulatedFree to openTax-free ISA growth

Platform	Min. invest	Fees	ISA	Best for
Trading 212	Start from £1	No commission	Yes	Beginner-friendly
Revolut	No minimum	Free plan available	Yes	All-in-one finance
Estateguru	Start from €50	No investor fees	—	Property-backed lending

Trading 212

Suited for: Beginner-friendly

Commission-free stocks & shares ISA. Clean app, no hidden charges, perfect for getting started.

Most popular choice for UK investors starting small

No commission on stocks1M+ UK usersFree ISA included

No commissionStart from £1FCA regulatedGet started free →

All-in-one appAffiliate

Revolut

Suited for: All-in-one finance

All-in-one finance app with savings vaults, stock trading, crypto, and multi-currency accounts. Great for everyday money management.

40M+ global usersInstant account setupSavings + investing in one app

Free plan availableNo minimumFCA regulatedGet started free →

Property-backed lendingAffiliate

Estateguru

Suited for: Property-backed lending

European property-backed lending platform. Returns are not guaranteed and your capital is at risk. Past performance is not a reliable indicator of future results.

Property-secured loansAuto-invest available

P2P lending is high risk. You could lose some or all of your money. Not covered by the FSCS.

No investor feesStart from €50Licensed by Estonian Financial Supervision AuthorityGet started free →

Capital at risk. These are informational suggestions, not financial advice.

Invest from £1 tax-free

Capital at risk

Start investing →

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Why inflation matters for your savings

Inflation silently erodes the value of money over time. At 2.5% annual inflation, £100 today will only buy about £54 worth of goods in 25 years. When you see a calculator showing your savings growing to £200,000, it's natural to feel excited — but in today's purchasing power, that might only be worth £120,000. This calculator shows you the real picture.

Nominal vs real returns

Nominal returns are the raw percentage your investment grows. Real returns subtract inflation. If your portfolio returns 7% and inflation is 2.5%, your real return is approximately 4.5%. This calculator applies inflation adjustment automatically when you set a rate in Advanced Settings, showing you results in today's money.

How to beat inflation with investing

Cash savings accounts rarely keep pace with inflation over the long term. Equities, property, and inflation-linked bonds have historically outpaced inflation. A diversified stock portfolio averaging 7% nominal returns delivers approximately 4–5% real returns — enough to genuinely grow your purchasing power over time.

Inflation-AdjustedCompound Calculator