Money
What If I Increased My Savings Every Year?
Short answer: start at £150 a month and raise it by 3% a year, and your monthly amount after 20 years is noticeably bigger than the first. An optional 4% illustrated rate shows what compounding adds. Neither percentage is a forecast.
What if I increased my savings every year?
A flat monthly amount is tidy and slightly unrealistic. Pay changes, bills change, and a standing order that never moves is quietly shrinking in real terms. This experiment starts at a monthly figure — default £150 — and lifts it once a year by a percentage you control, default 3%. Over 20 years the contribution in the last year is a different animal from the first. An optional 4% illustrated rate compounds monthly inside each year. Neither percentage is a forecast of wages or of returns. Think of it as a sketch of a habit that keeps its nerve when the first number starts to look small.
Written and checked by Aivora Digital · Last updated:
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Results update as you move the controls.
Optional. Not guaranteed.
Your result
£71,320
illustrated total
£48,367 put in · £22,954 illustrated growth
- Contributions
- £48,367
- Illustrated growth
- £22,954
- First-year monthly
- £150
- Last-year monthly
- £263
After 3% steps
What does that mean?
Starting at £150 a month and lifting it by 3% a year puts in £48,367 over 20 years. The last year’s monthly figure is about £263. An illustrated 4% rate — not guaranteed — sketches a total of £71,320. A flat £150 a month would have been £55,016 on the same rate.
At a glance
- Flat amount, same rate£55,016
- With the yearly bump£71,320
Compare
| 1% yearly rise | £59,980 |
|---|---|
| 3% yearly rise | £71,320 |
| 5% yearly rise | £85,575 |
Compare scenarios
The bump is trying to keep up, not to get rich
Three percent is close to the Bank of England’s inflation target plus a little, which is why it is a decent teaching default for a yearly raise in the standing order. It will not track anyone’s actual pay. Some years the bump will be too high to afford; the model does not pause.
Two percentages that should not be confused
The annual increase changes how much you put in. The illustrated rate changes what those amounts might do while they sit there. You can set the rate to zero and still see the power of the step-up. You can set the step-up to 1% and still see compounding. Mixing them into one vague “growth” is how illustrations become marketing.
Compared with starting earlier
Raising the contribution is one of the few levers left if a decade has already gone. The earlier-start experiment is the other picture: same amount, more years. People who like round stories will prefer one or the other. The arithmetic is happy to run both.
How we calculated this
Each year, 12 end-of-month contributions are added at that year’s monthly amount and compounded monthly at the annual rate ÷ 12. After each year the monthly amount goes up by the yearly increase you set (for example, 5% turns £100 into £105). Whole years only. This experiment provides estimates for educational purposes and is not financial advice. Actual results vary depending on rates, fees, taxes, inflation and individual circumstances. Both the increase and the rate are illustrations and not guaranteed.
Assumptions and limitations
This is a simplified estimate. Actual results depend on factors the model does not include.
This experiment provides estimates for educational purposes and is not financial advice. Actual results vary depending on rates, fees, taxes, inflation and individual circumstances.
- The annual increase happens every year on schedule.
- The monthly amount never falls.
- Partial years are not modelled.
- Pay, inflation and savings rates are not linked in the model, even though they are linked in real life.
- Fees, tax and withdrawals are omitted.
- Educational estimate, not financial advice.
Sources
- Bank of England — What is inflation?
A 3% yearly bump is in the same conversation as rising prices, not a claim that it matches them.
- MoneyHelper — Inflation and your savings
Why a flat contribution loses buying power even if the account balance rises.
- MoneyHelper — How to save
Reviewing a regular amount, rather than setting it once and walking away.
Go further
Related experiments that pick up where this one leaves off.
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