How much will £10,000 be worth in 10 years at 5%?

£10,000 at 5% annual compounding is worth £16,288.95 after 10 years. Add £200 a month and it becomes £47,526.55 after 10 years with monthly compounding.

What is compound interest?

Compound interest is interest earned on both your original money and the interest you have already earned. Over long periods it does most of the work — on £10,000 at 5%, the interest earned in years 21–30 (£16,686) is more than in the first 20 years combined.

Is a Cash ISA better than a normal savings account?

For tax, yes: interest in a Cash ISA is completely tax-free and does not use your Personal Savings Allowance. In a normal savings account, interest above £1,000 (basic rate) or £500 (higher rate) a year is taxed at your marginal rate.

What is the Personal Savings Allowance?

£1,000 of savings interest a year tax-free for basic-rate taxpayers, £500 for higher-rate taxpayers, and £0 for additional-rate taxpayers (2026/27). ISA interest does not count towards it.

What is the ISA allowance for 2026/27?

£20,000 per person per tax year across all your ISAs. Unused allowance cannot be carried forward.

Compound Interest Calculator UK

TL;DR: £10,000 left alone at 5% becomes £16,289 after 10 years, £26,533 after 20 years and £43,219 after 30 years. Add £200 a month and 10 years at 5% gives £47,526.55. A Cash ISA keeps all the interest tax-free; a normal savings account pays tax on interest above your Personal Savings Allowance.

Starting amount (£) Monthly contribution (£) Annual interest rate (%)

Years: 10 Compounding Inflation (% a year, for “in today’s money”) Account type Your income tax band (for the savings tax)

Tax on a normal savings account is worked out year by year: interest above your Personal Savings Allowance (£1,000 basic rate, £500 higher rate, £0 additional rate) is taxed at your marginal rate and taken off the balance. ISA interest is never taxed and does not use up your allowance. Figures are estimates, not financial advice.

The formula

Compound interest means you earn interest on your interest. The formula is A = P(1 + r/n)^nt + PMT × [((1 + r/n)^nt − 1) / (r/n)], where P is your starting amount, PMT is your monthly contribution, r is the annual rate, n is how often interest compounds each year, and t is the number of years. The calculator above runs the same maths month by month, and takes tax off year by year for normal savings accounts.

Cash ISA vs normal savings account

	Cash ISA	Normal savings account
Tax on interest	None — ever	Above your Personal Savings Allowance
Personal Savings Allowance used?	No	Yes
2026/27 allowance	£20,000 a year across all ISAs	No deposit limit
Best for	Shielding interest from tax	Money above the ISA allowance, or short-term saving

From 6 April 2027, tax on savings interest above your allowances rises to 24% (basic), 44% (higher) and 49% (additional). Interest inside an ISA stays completely tax-free.

Worked examples (£10,000 at 5%, annual compounding)

After	Balance	Interest earned
10 years	£16,288.95	£6,288.95
20 years	£26,532.98	£16,532.98
30 years	£43,219.42	£33,219.42

Sources: GOV.UK “Individual Savings Accounts (ISAs)” and “Tax on savings interest” (Personal Savings Allowance £1,000 / £500 / £0); HMRC Overview of Tax Legislation and Rates (savings rates from 6 April 2027). Checked 13 November 2026.

Important: Everything on this site is general information for planning purposes only. It is not professional financial advice, not tax advice, and not a substitute for advice from a qualified adviser. Rates and thresholds are for the UK tax year 2026/27 (6 April 2026 – 5 April 2027) unless stated otherwise, and can change. Figures are estimates — your actual pay depends on your tax code, pension scheme, student loan plan and other deductions. Check the current figures on GOV.UK or speak to a qualified adviser before acting.