What your result means
The headline is a nominal projection: what your balance would be if the return you set arrived every month, unchanged, for the whole period. Real markets do not behave like that, so treat the number as the arithmetic consequence of your assumptions rather than a forecast — for a year-by-year table of the same projection, use the compound interest calculator. The split between what you paid in and what growth added is the part that carries the lesson — early on almost all of the balance is your own money, and the crossover point where growth overtakes contributions is what the curve's bend is showing you.
Why this one is different
Two curves are drawn live on one chart: your plan, and the same plan started five years earlier — so the cost of waiting is something you see as a gap rather than read as a sentence. The contributions baseline and fee drag are drawn alongside.
How it works
Each month the balance earns one twelfth of the annual return, then your contribution is added. Because the interest is calculated on the previous month's balance — interest included — the growth compounds. The curve looks nearly straight for years and then steepens: that is not a change in the rate, it is the same rate applied to a much larger balance. The pale line runs the identical plan with a head start, so the vertical distance between the two lines at any point is the value of time in the market rather than extra money.
How to use this simulator
- Set your starting amount and what you can add each month.
- Set a return you are willing to defend, then move it a point either way to see how much rides on that guess.
- Set the horizon. Long horizons are where compounding does its work.
- Move the head-start slider to price the cost of waiting — the figure in the result panel is the difference in pounds.
- Share the link to hand someone the exact scenario.
Formula
r = annual return ÷ 12 n = years × 12
FV future value. P the starting amount. C the monthly contribution. r the monthly rate. n the number of months. The first term grows the money you started with; the second is the future value of the contribution stream. When the return is zero the second term becomes simply C × n, which is why the tool handles 0% without dividing by zero.
Example calculation
Balance after 25 years ≈ £167,740
You paid in £61,000, growth added £106,740
Same plan started 5 years earlier: £252,111
Frequently asked questions
Why does starting five years earlier beat paying in more later?
Because the earliest money compounds for the longest. In the worked example the five-year head start adds 12,000 pounds of contributions and 84,371 pounds of final value — about seven pounds of end balance for every extra pound paid in. Money added in the final years has almost no time to grow, so it arrives close to face value.
Is a 7% return realistic?
It is an assumption, not a forecast. Seven percent is a common illustrative figure for long-run global equities before inflation; after inflation the real figure is materially lower, and any single 25-year window can land well above or below it. Move the slider to see how sensitive the outcome is — that sensitivity is the honest headline, not the number itself.
Does this include tax, fees or inflation?
No. The curve is a nominal, gross projection: no platform or fund charges, no tax on interest or gains, no inflation adjustment. A 0.5% annual fee is roughly a 0.5 point cut to the return slider, and to see the result in today’s money subtract your inflation estimate from the return you enter.
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Assumptions & limitations
The smoothness of the curve is the biggest simplification on this page:
- A constant return. Real returns arrive unevenly, and the order they arrive in matters — especially once you start withdrawing. For that, use the Monte Carlo mode on the retirement calculator.
- Nominal, not real. No inflation adjustment: £252,111 in thirty years buys much less than it does today.
- No fees and no tax. Platform and fund charges come straight off the return; tax depends on the wrapper you use.
- Monthly compounding, contributions at month end. Annual or daily compounding shifts the total slightly.
- Contributions never change. No step-ups for pay rises, no pauses.
- General information, not financial advice.