Savings Calculator

A savings calculator models how a starting pot, plus regular monthly or annual deposits, grows over time when interest is compounded. With the Bank of England base rate at roughly 4.75% in 2025 and easy-access savings accounts paying 4-5% AER, even modest deposits can compound meaningfully over 10-20 years. The mathematics is identical whether you save into an instant access account, a fixed-rate bond, a Cash ISA or a Premium Bonds-equivalent — only the tax treatment changes. UK tax on savings interest depends on your income tax band and the use of the Personal Savings Allowance (PSA). Basic-rate taxpayers get £1,000 of interest tax-free each year; higher-rate get £500; additional-rate (income over £125,140) get nothing. On top of that, the starting rate for savings shields a further £5,000 of interest at 0% for low-income earners (income under £17,570 after personal allowance). Anything above is taxed at your marginal rate (20%/40%/45%). Above the PSA, even a 4% account effectively earns 3.2% for a basic-rate payer and 2.4% for a higher-rate payer. This is where an ISA wrapper becomes powerful: every penny of interest inside a Cash ISA is tax-free for life, the wrapper preserves your £20,000 annual allowance even if you transfer between providers, and there is no PSA-style cap. For a higher-rate taxpayer with £25,000 saved at 4.5%, sheltering the lot in a Cash ISA saves £450 a year in tax — equivalent to a 1.8% rate boost. Use the ISA Calculator for ISA-specific projections. This calculator also adjusts results for inflation: with CPI around 2-3% in 2025, a 5% nominal return is only a 2-3% real return — meaning £10,000 today buys roughly £7,400 of goods in 10 years if inflation runs at 3%. Below the calculator we show both nominal and real-terms figures so you do not overestimate purchasing power. FSCS protection covers up to £85,000 per banking licence per individual — if you save more, spread between licences to stay fully protected. The calculator does not handle variable rates within a fixed term, withdrawal restrictions on notice accounts, or Sharia-compliant Expected Profit Rate accounts (which work similarly but cannot guarantee a fixed return). For pension savings projections use the Pension Calculator; for first-home savings use the Lifetime ISA Calculator.