Everything you need to plan, grow and protect your savings. Calculate compound interest, model retirement pots, find your emergency fund target, compare savings rates and understand exactly what inflation is doing to your money.
Saving money is straightforward. Making the most of what you save requires understanding compounding, inflation, interest rates and time. A 1% higher savings rate on £20,000 earns an extra £200 in year one — but over 10 years with compounding, that difference grows to over £2,200. Our free calculators make these numbers visible instantly, so you can make decisions based on real figures rather than guesswork.
Compound interest is interest earned on your interest. At 5% AER, £10,000 becomes £10,500 after year one. In year two, you earn 5% on £10,500 — not £10,000. After 20 years, your £10,000 becomes £26,533. After 30 years, £43,219. The growth is not linear — it accelerates. Starting 10 years earlier than a colleague who saves the same amount can result in nearly double the final pot.
AER (Annual Equivalent Rate) is the standardised comparison metric for UK savings accounts. It shows the effective annual return after accounting for how often interest is compounded — monthly, quarterly or annually. A monthly compounding account at 4.8% gross earns slightly more than an annually compounding account at 4.8% gross. The AER makes them directly comparable.
If inflation runs at 3% and your savings earn 2% AER, your money is losing real purchasing power at 1% per year. After 10 years, £10,000 in real terms becomes £9,044. This is why our Inflation Impact tool shows both the nominal value and the real (inflation-adjusted) value of your savings — because the number on your statement can be misleading.
The £20,000 annual ISA allowance (2026/27) lets you shelter interest from tax. At a 40% tax rate, a 5% gross account effectively pays 3% after tax. A 4.8% Cash ISA beats it. Higher-rate taxpayers should always prioritise their ISA allowance before standard accounts for any savings they plan to hold for more than 12 months.
Fixed-rate bonds typically pay 0.3–0.8% more than easy-access accounts of equivalent quality. Whether the premium is worth it depends on whether you need the money during the term. Our Fixed Deposit estimator and High-Yield Comparison tool show the exact pound difference for your specific savings amount and timeframe.
| Account Type | Typical AER Range | Access | Tax Treatment | Best For |
|---|---|---|---|---|
| Easy-Access Savings | 4.3% – 5.0% | Instant | Taxable (PSA applies) | Emergency fund, short-term savings |
| Cash ISA (easy-access) | 4.2% – 4.8% | Instant | Tax-free | 40%+ taxpayers, long-term savings |
| 1-Year Fixed Bond | 4.8% – 5.3% | At maturity only | Taxable | Lump sums not needed for 1 year |
| 2-Year Fixed Bond | 4.9% – 5.5% | At maturity only | Taxable | Longer commitment, higher return |
| Regular Savings Account | 5.0% – 7.0% | Monthly deposits | Taxable | Building a savings habit monthly |
| Premium Bonds (NS&I) | 4.4% prize rate | Monthly prize draws | Tax-free prizes | Tax-free, secure, no guaranteed return |
Since 2016, UK savers receive a Personal Savings Allowance (PSA) before interest becomes taxable. Basic-rate (20%) taxpayers get £1,000 tax-free interest per year. Higher-rate (40%) taxpayers get £500. Additional-rate (45%) taxpayers get no PSA. At 5% AER, a basic-rate taxpayer can hold up to £20,000 in a standard account before paying tax on savings interest. Above that, a Cash ISA becomes more tax-efficient.
The Financial Services Compensation Scheme (FSCS) protects up to £85,000 per person per authorised institution (£170,000 for joint accounts). If your savings exceed this, spread them across multiple FSCS-protected providers. Note that some banks share a banking licence — Halifax and Bank of Scotland, for example — so deposits with both only receive one £85,000 protection.
In 2026, top easy-access accounts offer 4.3–5.0% AER. Fixed-rate bonds (1–2 years) offer 4.8–5.5% AER. Regular saver accounts can reach 5–7% AER for monthly contributions. Cash ISAs offer 4.2–4.8% tax-free. Always compare using AER — not gross rate or headline rate — as AER accounts for compounding frequency and is the legally required comparison metric in the UK.
Most UK financial advisers recommend 3–6 months of essential expenses (rent/mortgage, bills, food, transport) in an instantly accessible account. For self-employed workers, freelancers or those with variable income, 6–12 months is more appropriate. Our Emergency Fund Calculator works out your personalised target based on your monthly outgoings and how long you could realistically job-search.
It depends on your tax rate and savings amount. Basic-rate taxpayers with under £20,000 in savings at 5% AER stay within the £1,000 PSA — a standard account is fine. Higher-rate taxpayers with a £500 PSA should prioritise Cash ISA for any savings likely to generate over £500 in annual interest. At £10,000 at 5% = £500 — right at the limit. Our comparison tools show the exact post-tax difference for your situation.
The gross rate is the stated annual interest rate before tax and without considering compounding frequency. AER (Annual Equivalent Rate) shows what you would earn if interest were compounded annually, regardless of how often the account actually compounds. This makes it the standardised comparison metric — always compare savings accounts by AER, never by gross rate alone.
Inflation reduces the real purchasing power of your savings. If your account earns 3% AER but inflation runs at 4%, your money is losing real value at 1% per year. After 10 years, £10,000 in nominal terms might show as £13,439 on your statement — but in real terms it only buys £9,083 worth of goods at today's prices. Our Inflation Impact tool makes this visible with a split view of nominal versus real value.
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