Investment Calculator
Our investment calculator projects the long-term growth of any investment portfolio through compound returns — showing how regular contributions and reinvested gains accumulate over 5, 10, 20, or 30 years. Whether you are starting an investment ISA, building a stocks and shares portfolio, or modelling pension fund growth, this calculator reveals the full power of long-term investing.
Investment Calculator
Project how your investments could grow over time — and see what your money could be worth in real terms.
Investments can go down as well as up. Past performance is not a guide to future results.
Investment Returns vs Savings Returns
The long-run real return from global equities has historically averaged approximately 5–7% per year after inflation — significantly above the 1–2% real return available from cash savings. The trade-off is volatility: equity markets fall significantly in some years, sometimes by 20–40%, before recovering. For investors with a 10+ year horizon, this volatility is manageable — but for shorter-term goals, it represents real risk.
On a £10,000 initial investment with £500 per month at 7% for 20 years, the projected portfolio value is approximately £293,000 — of which £130,000 are contributions and £163,000 is investment growth. The same scenario at 5% produces £222,000. The difference of £71,000 illustrates why even a 2% improvement in long-run return — through lower platform fees, better fund selection, or asset allocation — compounds into very significant sums over two decades.
Investment Costs and Their Impact
Investment platform fees and fund ongoing charges materially affect long-term outcomes. A 1.5% annual charge versus 0.5% annual charge on a £100,000 portfolio over 20 years at 7% growth costs approximately £60,000 in lost returns. Keeping total annual costs below 0.5% (platform plus fund charges) is achievable with low-cost index trackers on competitive platforms and significantly improves long-term outcomes.
Frequently Asked Questions
A Stocks and Shares ISA (up to £20,000 per year, tax-free growth and withdrawals) is optimal for most non-pension investing. A Self-Invested Personal Pension (SIPP) adds upfront tax relief but restricts access until age 57. Many investors use both: ISA for accessible medium-term savings and SIPP/workplace pension for retirement. Our ISA Calculator models tax-free growth alongside this general investment projection.
For long-term equity investments (10+ years), 5–7% per year in real terms (after inflation) is a reasonable planning assumption based on historical global equity returns. For cash, 1–3% real return is more realistic at current rates. For blended portfolios (60% equity, 40% bonds), 4–5% real return is a common planning assumption.
Nominal returns (before inflation) are what the calculator shows. Real returns (after inflation) show purchasing power growth. If your portfolio grows at 7% nominally and inflation is 2.5%, your real return is approximately 4.5%. For long-term planning, focusing on real returns gives a more accurate picture of future buying power.
Both strategies work well over long periods. Lump sum investing is mathematically superior in a rising market (more money invested for longer). Monthly investing (pound-cost averaging) reduces the risk of investing at a market peak — you buy more units when prices fall. For most people without a large lump sum, regular monthly investing is the practical choice regardless.
Passive funds (index trackers) aim to match market returns at very low cost (typically 0.05–0.20% annual charge). Active funds aim to beat the market through stock selection, at higher cost (typically 0.7–1.5% annual charge). Evidence consistently shows that most active funds underperform their benchmark index after costs over the long term. Our Compound Interest Calculator illustrates how even a 0.5% cost difference compounds over decades.
Enter a starting lump sum and monthly contribution, then set the expected annual return and time horizon. For long-term equity investments, 5-7% per annum after inflation is a frequently used planning assumption. Subtract any ongoing platform and fund charges — at 0.5% total annual charge, a 6% expected return becomes an effective 5.5%. Over decades this difference compounds into a significant sum. The calculator shows total invested versus total value at the end of the period, illustrating how much of the final figure is growth rather than contributions. Tax wrappers matter: inside a Stocks and Shares ISA, all growth is tax-free. Inside a SIPP, contributions receive tax relief but withdrawals are taxed as income in retirement. For general investment accounts, capital gains above the annual exempt amount are subject to CGT.
Important Information
This calculator is provided for general information and planning purposes only. It does not constitute financial or tax advice and should not be relied upon as such. Figures are indicative estimates based on simplified, publicly available criteria and stated assumptions. Actual results depend on your full circumstances. See our Disclaimer for further information.