Use this free UK savings calculator to see how your money grows with compound interest over any period. Enter your initial deposit, monthly contribution and interest rate to see your final savings pot, total interest earned and when you'll reach your savings goal. Works for Cash ISAs, easy-access accounts and fixed-rate savings. The ISA allowance for 2026/27 is £20,000 — dropping to £12,000 for under-65s from April 2027. FSCS protection up to £85,000 per institution. Updated May 2026. Instant results. No sign-up.
Savings grow through compound interest — you earn interest on your interest as well as your principal. The ISA allowance for 2026/27 is £20,000 per year — any interest earned inside an ISA is completely tax-free. Outside an ISA, basic rate taxpayers get a £1,000 personal savings allowance before paying tax on interest; higher rate taxpayers get £500. In 2026, easy-access savings accounts are paying around 3.5–5% AER. On £10,000 at 4.5% AER over 5 years with no additional contributions, you would accumulate approximately £12,461 — £2,461 in interest. Always compare savings rates on AER (Annual Equivalent Rate), not gross rate, as AER accounts for compounding frequency and gives a like-for-like comparison.
Compound interest is the single most powerful force in personal finance — but it works so slowly at first that most people underestimate it. Here's how it actually works and why time is the biggest variable.
Simple interest pays you a fixed percentage of your original deposit each year. Compound interest pays you interest on your original deposit AND on all the interest already earned. The difference compounds over time.
The compounding effect accelerates in the later years. In years 1–5 the difference is small. By years 15–20 it becomes dramatic. This is why starting early matters far more than the amount you start with.
If your interest will exceed your personal savings allowance (£1,000 basic rate / £500 higher rate), an ISA protects all growth from tax. At 4.5%, you'd need over £22,000 saved before basic-rate tax kicks in — but higher earners hit the limit much faster.
If your total interest will comfortably stay below your allowance, a standard savings account with a better rate beats a lower-rate ISA. Always compare AER first — a 0.5% rate difference outweighs the tax benefit for most savers.
The Lifetime ISA (LISA) is a special case — the 25% government bonus (up to £1,000/year) makes it the best savings vehicle available for first-time buyers under 40 and for retirement. The catch: money can only be withdrawn for a first home purchase, at age 60, or with a 25% penalty.
The 2026/27 tax year (ending 5 April 2027) is the last year under-65s can deposit up to £20,000 into cash ISAs. From the 2027/28 tax year, the cash ISA subscription limit drops to £12,000 for savers under 65. The full £20,000 allowance will only be available to savers aged 65 and over, or if you invest at least £8,000 into a Stocks and Shares ISA alongside your cash ISA.
If you have unused ISA allowance for 2026/27 — act before 5 April 2027. Unused allowance cannot be carried forward.
Rates change frequently — always check comparison sites for the latest. The figures below represent typical ranges as of May 2026. Always compare AER (Annual Equivalent Rate) — not gross rate — as AER accounts for compounding frequency and gives a like-for-like comparison.
| Account type | Typical rate (AER) | Top rate (AER) | Key feature |
|---|---|---|---|
| Easy access savings | 3.5–4.5% | ~5.0% | Withdraw anytime. Rate can change. |
| Easy access Cash ISA | 3.5–4.5% | ~4.51% | Tax-free interest. Withdraw anytime. |
| Fixed-rate bond (1 year) | 4.0–4.6% | ~4.66% | Locked for 12 months. Higher rate. |
| Fixed-rate Cash ISA (1 year) | 4.0–4.6% | ~4.66% | Tax-free + locked rate. Best of both. |
| Notice account (30–90 days) | 3.8–4.5% | ~4.6% | Higher than easy access, not locked. |
| Lifetime ISA (LISA) | Variable + bonus | +25% gov bonus | For first homes / retirement only. Age 18–39. |
Rates correct as of May 2026. Top easy access ISA rate from Trading 212 (4.51%). Top 1-year fixed ISA rate from UBL UK (4.66%). Rates change frequently — always verify on MoneySavingExpert or a comparison site before opening an account.
Withdraw anytime without penalty. Rate is variable — can rise or fall. Best for emergency funds and money you may need soon.
Lock money away for 1–5 years for a guaranteed rate. Early withdrawal usually triggers an interest penalty. Best when rates are high and expected to fall.
Give notice (typically 30–90 days) before withdrawing. Better rate than easy access, more flexible than fixed. Good middle ground.
The Financial Services Compensation Scheme (FSCS) protects cash savings up to £85,000 per person per institution if a bank or building society fails. This limit is set to rise to £110,000 in late 2025/26 — check the FSCS website for the latest confirmed date. If you have more than £85,000 with one provider, split savings across multiple institutions to stay within the protected limit at each one.
Note: brands sharing a banking licence share a single £85,000 limit. For example, Halifax and Bank of Scotland share a licence — savings across both only protected up to £85,000 combined.