Savings Goal Calculator
Work out how much you need to save each month to reach a target by a date, and how much of that target the interest saves you from putting in yourself.
| What you have already | £5,000 |
|---|---|
| Monthly deposits over the term | £9,755 |
| Interest earned | £5,245 |
| What you have at the end | £20,000 |
Of the £20,000 you end with, £5,245 is interest, 26.2% of the pot, money you never paid in. That is why the monthly deposit is smaller than dividing the goal by the number of months would suggest.
- What you pay in
- Interest
- Your goal
Saving £81.29 a month, the pot builds to £20,000 over 10 years, reaching the dashed £20,000 goal line. Of the total, £5,245 is interest.
| Year | Balance | Paid in | Interest |
|---|---|---|---|
| 0 | £5,000 | £5,000 | £0 |
| 1 | £6,220 | £5,975 | £245 |
| 2 | £7,496 | £6,951 | £546 |
| 3 | £8,829 | £7,926 | £903 |
| 4 | £10,222 | £8,902 | £1,320 |
| 5 | £11,677 | £9,877 | £1,800 |
| 6 | £13,200 | £10,853 | £2,347 |
| 7 | £14,789 | £11,828 | £2,961 |
| 8 | £16,450 | £12,804 | £3,646 |
| 9 | £18,185 | £13,779 | £4,406 |
| 10 | £20,001 | £14,755 | £5,247 |
Information
This is the savings question asked the other way round. Instead of "if I save this much, what will I have?", it answers "if I want this much by then, how much must I save?". You give it the amount you are aiming for, what you have already, how long you have, and the rate, and it finds the level monthly deposit that lands exactly on the target.
Why the deposit is smaller than you might expect. The interest does part of the work. Every pound you put in earns interest, and that interest earns interest of its own, so by the end a slice of the target was never money you paid in. The chart splits the goal into the two, and the longer you have, the bigger the interest slice and the smaller the deposit you need.
Why there is no income box, and no tax. The monthly amount you need does not depend on your tax. Savings interest is paid in full: when tax is due, HMRC collects it from your salary or through Self Assessment, never from the account, so the pot grows at the full rate whatever your tax position. That means the deposit that reaches your target is identical in a cash ISA and a normal savings account. Tax changes what the goal costs you, not what it requires, so this page has no business asking for your income. If you want to see the tax on the interest for a given salary, that is the Savings calculator; if you want the tax sheltered, that is the ISA calculator. Neither changes the figure here.
When you need to save nothing, and when the goal is out of reach. If what you have already grows past the target on its own within the time, the answer is a genuine £0 a month and the page says so. At the other end, if even the largest monthly amount this page models would not get you there, the goal is out of reach in the time you have: over a short period interest barely helps, so almost the whole target must come from your own deposits. A longer term or a smaller target brings it back.
What's simplified. The rate is held flat for the whole term, whereas easy access rates move with the Bank of England base rate. The target is in today's money but you save in future pounds, so a goal several years away buys a little less then than the same number does now. Open the full planner to model a changing rate, a rising deposit, and your savings in today's money.
FAQ
- How is the monthly amount worked out?
The calculator grows your starting balance and each monthly deposit at the rate you enter, compounding the interest, and finds the level monthly figure that lands exactly on your target by your date. It is the same maths as a savings growth projection, solved for the deposit instead of the final balance, so the two calculators agree to the penny on the same inputs.
- Do I pay tax on the interest, and does it change the amount I need to save?
You might pay tax on the interest, but it does not change the monthly amount. Savings interest is paid in full, and when tax is due HMRC collects it from your salary or through Self Assessment, not from the account, so the account grows at the full rate whatever your tax position. That is why this page does not ask for your income. The Savings calculator shows what the tax on the interest would be for a given salary.
- Would an ISA get me there for less?
No, for the same reason: the account grows gross either way, so the monthly deposit that reaches your target is identical in a cash ISA and a normal savings account. What an ISA changes is the tax on the interest, not the deposit. If your interest would push you over your Personal Savings Allowance, an ISA saves you that tax, which is a reason to prefer one, but it does not change the figure on this page. The ISA calculator models the sheltered version.
- It says I need to save nothing. Is that right?
Yes, if what you have already saved grows past your target on its own within the time. The interest alone does the rest, so no monthly deposit is needed, though adding anything gets you there sooner or leaves you with more.
- It says my goal is out of reach. Why?
Because even the largest monthly amount this page models would not get you there in the time. Over a short period interest barely has a chance to help, so almost the whole target has to come from your own deposits, and there may simply not be enough months. A longer term or a smaller target brings it back within range.
- Does this account for inflation?
No. Your target is in today's money, but you save in future pounds, so a goal several years away buys a little less then than the same number does now. The full planner can show your money in today's money as well as future pounds.
Sources
- Tax on savings interest (GOV.UK)
Disclaimer
Not financial advice. The monthly figure above is a projection from the inputs and assumptions you provided; what you actually need depends on the rate your account actually pays, which can be cut at any time, and on sticking to the deposit every month. Check your provider's own figures and consult a qualified adviser before making a decision based on these numbers.
