Money
What If I Increased My Savings Every Year?
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.
Change this
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 annualRate ÷ 12. After each year the monthly amount is multiplied by (1 + annualIncrease). 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.
Go further
A curated rabbit hole from this question. Each link is a real experiment, not a random suggestion.
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