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The only question is whose side it's on. The same maths that turns £150 a month into six figures is the maths that keeps a credit card alive for thirty years. Run it both ways, and find the month it changes hands.
Most savings accounts pay interest once a year; most investments and stocks-and-shares accounts effectively compound as you go. Monthly is the more optimistic of the two.
Modelled the way UK cards usually set it: 1% of the balance plus that month's interest, with a £5 floor. It falls as the balance falls, which is exactly why it takes so long.
If you paid a little more
What you end up with
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Save as PDF opens your browser's print dialog. Choose Save as PDF from the destination list in the browser's own dialog, not the system print dialog's PDF menu, which re-renders the page and drops the links. You get a sheet with your figures and the year-by-year table.
The currency buttons change the symbol only. Nothing is converted between currencies and no rate changes with them, so £1,000 becomes $1,000, not its exchange value. Everything you type stays in this browser (nothing is sent anywhere) and is still here when you come back. Educational tool, not regulated financial or investment advice.
Read This First
Everyone shops around for a better percentage. Almost nobody shops around for more years, and the years are where nearly all of the money is.
£200 a month for 40 years, at 5% ≈ £305,000
£400 a month for 20 years, at 5% ≈ £164,000
Identical £96,000 paid in. Identical rate. The only difference is how long it was left alone, and that difference is worth about £141,000.
Simple interest pays you on what you put in. Compound interest pays you on what you put in plus everything it has already earned. In year one that difference is invisible, which is why most people give up before it shows. By year twenty-five the interest is quietly out-earning your own deposits, and from that point the account is doing more work than you are. The chart above marks the exact month that happens.
Put £250 a month away from 25 to 65 at 5% and you finish near £381,000. Start the same £250 at 35 instead and you finish near £208,000. The ten years you skipped only cost you £30,000 of actual deposits, but they cost roughly £173,000 of the result. You cannot make that up by paying in harder afterwards, only by starting.
A steady rate every single year, no missed months, no fees, no tax, and no inflation. Real life gives you none of that. Investment returns arrive in a jagged line, not a smooth curve, and £305,000 in forty years will not buy what £305,000 buys today. Treat the number as a direction of travel, not a promise, and check whether an ISA keeps the tax off it.
Flip the tool to working against you. A £3,200 balance at 24.9% APR, paying only the minimum, takes the better part of thirty years to clear, because the minimum shrinks as the balance shrinks and keeps the debt alive. It is not that you borrowed too much. It is that compounding is patient, and a minimum payment is designed to let it be.
Clear the expensive debt first. A card at 24.9% is a guaranteed 24.9% loss every year you carry it. No savings account and no realistic investment beats that, so paying it down is the highest-return thing available to you.
Pay a fixed amount, not the minimum. Switch the tool to a fixed payment and hold it steady as the balance drops. That single change is usually the difference between three years and thirty.
Start the savings side small, but start it. £25 a month from today beats £250 a month from a someday that keeps moving. The years are the part you can never buy back.
Automate it on payday. Compounding only rewards the months you actually paid in. A standing order the day after you're paid removes the decision, and the decision is what people miss.
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