This calculator compares two scenarios side by side. Scenario A shows the power of regular monthly contributions into an ISA or savings account. Scenario B shows what happens if you pay in a lump sum once and leave it alone. The chart shows both growing year by year.
A lump sum compounds on a fixed amount. Monthly contributions compound on a growing amount — each new payment immediately starts earning interest. Over 10, 15, or 20 years this gap becomes dramatic.
- Is it better to invest a lump sum or monthly?
- For most people starting later in life, regular monthly contributions beat a one-off lump sum over time. Monthly contributions keep adding to the compounding base, whereas a lump sum only compounds on the original amount.
- Is it too late to start investing at 55?
- No. At 55 with 20 years to invest, £200/month at 6% grows to over £93,000. Even 10 years of consistent saving produces significant results.
- What is the ISA allowance for 2025/26?
- The annual ISA allowance is £20,000. All growth within an ISA is completely tax-free.
- What is compound interest?
- Compound interest means you earn interest not just on your original investment, but on the interest that has already accumulated. Over time this creates exponential growth — each year's interest is calculated on a larger and larger total, so the growth accelerates the longer you stay invested.
- What is the annual ISA allowance for 2025/26?
- The annual ISA allowance is £20,000. All growth within an ISA — including interest, dividends, and capital gains — is completely tax-free. There is no tax to pay when you withdraw money from an ISA either.
- Is it too late to start investing at 55?
- Not at all. At 55 with 20 years to invest, £200 per month at 6% annual return grows to over £93,000. Even 10 years of consistent saving produces significant results. The key is starting — time in the market matters more than timing the market.