UK Savings Calculator 2026

Project how your savings grow with compound interest and regular monthly deposits.

Calculate Your Savings Growth

£
Leave at 0 if you have no existing savings
£
Regular amount you will add each month
%
Use the AER shown on your account
yrs
How often the bank applies interest to your balance
Final Balance
Interest Earned
Total Deposited
Initial deposit
Monthly deposits
Total deposited
Compound frequency
Annual interest rate (AER)
Savings period
Total interest earned
Tax tip: Interest earned outside an ISA counts toward your Personal Savings Allowance — £1,000 for basic rate taxpayers, £500 for higher rate. Interest above your allowance is taxable. A Cash ISA earns interest completely free of tax, with an allowance of £20,000/year.
Year Deposited Interest Cumulative Interest End Balance

How the Savings Calculator Works

This calculator uses the standard compound interest formula to project how a savings account grows over time. Both your initial deposit and regular monthly contributions are factored in, along with the compound frequency of your account.

Compound Interest: The Core Formula

The final balance is calculated as:

Balance = P × (1 + r/n)nt + PMT × [(1 + r/n)nt − 1] ÷ (r/n)

Where P is the initial deposit, r is the annual interest rate, n is the compounding frequency per year, t is the number of years, and PMT is the regular deposit per period. Monthly deposits are treated as end-of-period payments.

Why Compound Frequency Matters

Interest that compounds monthly grows slightly faster than interest that compounds annually at the same headline rate. This is because monthly compounding applies interest to interest more frequently. Banks in the UK typically express rates as AER (Annual Equivalent Rate), which accounts for compounding — so two accounts with the same AER will grow at the same rate regardless of how often they technically compound. When using this calculator, enter the AER shown on your account.

Types of UK Savings Accounts

Account typeAccessTypical rate (2026)Best for
Easy accessInstant4.0–5.0% AEREmergency fund
Notice account30–120 days4.5–5.2% AERMedium-term savings
Fixed-rate bondAt term end4.5–5.5% AERLump sum you won't need
Cash ISAVaries4.0–5.0% AERTax-free savings
Regular saverAt term end5.0–8.0% AERMonthly saving habit

The Personal Savings Allowance (PSA)

Interest earned outside an ISA is subject to income tax above your Personal Savings Allowance:

With savings rates at 4–5%, a basic rate taxpayer earning more than £1,000 in interest would need a pot of around £20,000–£25,000 before tax becomes a concern. At that point, moving savings into a Cash ISA makes clear sense.

Cash ISA Allowance 2026/27

Each adult can save up to £20,000 into ISAs per tax year (6 April to 5 April). Interest inside a Cash ISA is completely tax-free and does not affect your PSA. You can hold a Cash ISA alongside other ISA types, as long as total contributions stay within £20,000. Unused allowance cannot be carried forward to the next tax year.

The Power of Starting Early

Time is the most important variable in any savings projection. £200/month saved for 30 years at 4.5% produces nearly three times more interest than £200/month saved for 15 years — not twice as much, because compound interest accelerates over time. Even small regular deposits started early consistently outperform larger deposits started later.

Worked Examples

Three realistic UK savings scenarios — all projected with monthly compounding and end-of-period deposits.

Rachel, 28 — House Deposit
£5,000 initial · £400/month · 4.5% Cash ISA · Monthly compounding · 5 years
Total deposited£29,000
Interest earned£4,117
Final balance£33,117
Tom, 35 — Emergency Fund
£1,000 initial · £200/month · 4.0% easy access · Monthly compounding · 3 years
Total deposited£8,200
Interest earned£564
Final balance£8,764
Sarah & James, 40 — Long-term Wealth
£10,000 initial · £500/month · 5.0% fixed/ISA mix · Monthly compounding · 20 years
Total deposited£130,000
Interest earned£102,643
Final balance£232,643

All projections assume the stated interest rate is maintained for the full period and contributions are made every month. Actual rates on variable accounts will fluctuate. Not financial advice.

Frequently Asked Questions

The Personal Savings Allowance (PSA) for 2026/27 is £1,000 for basic rate taxpayers and £500 for higher rate taxpayers. Additional rate taxpayers have no allowance — all savings interest is taxable. Interest earned inside a Cash ISA is always tax-free and does not use any of your PSA. If your interest income is likely to exceed your PSA, a Cash ISA is usually the most straightforward solution.
The ISA allowance for 2026/27 is £20,000 per person per tax year. This can be split across a Cash ISA, Stocks and Shares ISA, Innovative Finance ISA, and Lifetime ISA (limited to £4,000 within the £20,000 cap, with a 25% government bonus on contributions up to £4,000). All interest and investment growth inside an ISA is completely free of Income Tax and Capital Gains Tax. Unused allowance does not carry forward.
Compound interest means you earn interest on both your original deposit and the interest you've already accumulated. For example, £1,000 at 5% annual interest earns £50 in year 1. In year 2, you earn 5% on £1,050 — not just £1,000 — so you earn £52.50. Over decades, this effect accelerates dramatically. Monthly compounding compounds faster than annual because interest is applied to interest 12 times per year rather than once.
Easy access accounts let you withdraw money whenever you need it — rates track the Bank of England base rate and change over time. Fixed-rate bonds lock your money for a set term (typically 1–5 years) in exchange for a higher, guaranteed rate. Notice accounts require you to give advance notice before withdrawing (typically 30–120 days) and pay more than easy access. For money you are certain you won't need for a defined period, fixed-rate bonds typically offer the highest rates.

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