Savings goal calculator
Two ways round the same question. Tell it when you want the money and it works out the monthly saving, or tell it what you can afford and it works out how long that will take.
Your goal
Your result
You need to save
£0.00
Getting there
Where your contributions end and the interest begins.
How this is worked out
To find the monthly saving, the calculator uses the future value of an annuity, rearranged to solve for the contribution. Anything you have already saved is grown forward first, and the monthly amount only has to cover what is left.
i = annualRate ÷ 100 ÷ 12
n = years × 12
monthly = (target − saved × (1 + i)^n) × i
÷ ((1 + i)^n − 1)
To find how long it takes instead, it simply steps forward month by month, adding interest and then your contribution, until the balance reaches the target.
A worked example
To reach £20,000 in 5 years with £2,000 already saved, at 4%, you would need about £264 a month. You would pay in roughly £15,800 of your own money, and interest would supply the remaining couple of thousand.
Making the number achievable
If the monthly figure comes out higher than you can manage, there are only four levers: save for longer, lower the target, find a better rate, or accept the shortfall and plan around it. The rate is usually the weakest of the four over short periods, because interest has little time to work. On a two-year goal, the account you choose barely matters. On a twenty-year one, it matters enormously.
What this assumes
- Contributions are made every month without fail, at the end of the month.
- The interest rate stays the same for the whole period.
- Interest is added monthly and left to compound.
- No tax is deducted. Interest may be taxable depending on the account and your allowance.
- Nothing is withdrawn along the way, and inflation is not accounted for. A target set today will buy less in ten years' time.
Before you lock money away
Accounts paying the best rates often require notice or a fixed term, and getting the money out early can forfeit the interest. If this pot doubles as your emergency fund, keep it somewhere you can reach quickly, even at a lower rate.