Savings Goal Calculator UK

Q: What is the ISA allowance for 2025/26?

The annual ISA allowance for 2025/26 is £20,000. You can split this across Cash ISA, Stocks & Shares ISA, Innovative Finance ISA, and Lifetime ISA (max £4,000 of the £20,000 total). All interest, dividends, and growth within an ISA are completely tax-free.

Q: What is the Personal Savings Allowance?

The Personal Savings Allowance lets you earn savings interest tax-free outside of an ISA. Basic-rate taxpayers can earn up to £1,000 in interest tax-free, higher-rate taxpayers get £500, and additional-rate taxpayers get no allowance. There is also a starting rate for savings of up to £5,000 at 0%, reduced by non-savings income above £12,570.

Q: What are the best savings rates in the UK right now?

As of March 2026, typical rates are: easy-access savings approximately 4.5% AER, fixed-rate 1 year approximately 4.8% AER, and Cash ISAs approximately 4.3% AER. Regular saver accounts can offer 5-6% AER but cap monthly deposits. Rates change frequently, so always check the latest best-buy tables.

Calculate how much to save each month, how long it will take to reach your goal, and compare ISA (tax-free) vs regular savings accounts. Uses UK 2025/26 ISA limits, Personal Savings Allowance, and current rates.

How much do you need to save each month to reach your goal?

Savings goal

Target amount you want to save

Target date (months)

months

Number of months to reach your goal

Current savings

Amount you have already saved

Expected interest rate (AER)

Annual interest rate on your savings

Account type

ISA interest is tax-free; regular accounts may be taxed

Compounding frequency

How often interest is calculated

Adjust for inflation (2.5%)

Increase target to maintain purchasing power

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Try another scenario

How to Use This Calculator

Reach My Goal tab

Enter your savings goal (e.g. £30,000 for a house deposit), target date in months, and any current savings. The calculator uses the future value of annuity formula to determine the exact monthly amount you need to save, accounting for compound interest. It shows a year-by-year breakdown and milestone markers at 25%, 50%, 75%, and 100% of your goal.

How Long? tab

Enter your monthly savings amount, current savings, and savings goal. The calculator projects month by month, compounding interest, until your balance reaches the target. It tells you the total time in years and months, plus how much comes from your contributions versus interest earned, with projected balance at key intervals.

ISA vs Savings tab

Enter your monthly contribution, interest rate, tax band, and time period. The calculator compares a Cash ISA (where all interest is tax-free) against a regular savings account (where interest above your Personal Savings Allowance is taxed at your marginal rate). See the exact ISA advantage in pounds.

More Options

Expand More Options in any tab to set account type (ISA or regular), compounding frequency (monthly or annually), and toggle inflation adjustment. These settings refine your projection for a more realistic picture.

Share your result

Every input is encoded in the URL. Click Share to send your exact scenario to a partner, financial adviser, or save it for later.

The Formula

The Reach My Goal tab uses the future value of annuity formula to calculate the required monthly payment:

FV = PMT × ((1 + r)ⁿ − 1) / r

Where:
FV = future value (target amount minus future value of existing savings)
PMT = monthly payment (what we solve for)
r = monthly interest rate (annual rate ÷ 12)
n = total number of months

Rearranged: PMT = FV × r / ((1 + r)ⁿ − 1)

Existing savings grow separately: FV_existing = existing × (1 + r)ⁿ

The ISA vs Savings tab calculates interest year by year. For the regular account, interest above the Personal Savings Allowance (£1,000 basic, £500 higher, £0 additional) is taxed at the marginal rate (20%/40%/45%).

Example

Sarah — saving £30,000 for a house deposit

Sarah is 28 and wants to buy her first home in 5 years. She has £5,000 in savings and expects 4.5% AER on a Cash ISA.

Reach My Goal

Savings goal£30,000

Timeframe60 months (5 years)

Current savings£5,000

Interest rate4.5% AER

Monthly saving needed£389/month

Sarah needs to save approximately £389 per month to reach £30,000 in 5 years. She contributes £23,340 in total, existing savings grow, and interest adds approximately £1,660.

ISA vs Savings

Monthly contribution£400

Rate4.5% AER

Tax bandBasic rate (20%)

Period5 years

ISA final value£26,578

Regular account final value£26,487

ISA advantage£91

At this savings level, the ISA advantage is modest because much of the annual interest falls within the £1,000 Personal Savings Allowance. For higher-rate taxpayers or larger balances, the ISA advantage grows significantly.

FAQ

What is the ISA allowance for 2025/26? ▼

The annual ISA allowance for the 2025/26 tax year is £20,000. You can split this across different ISA types: Cash ISA, Stocks & Shares ISA, Innovative Finance ISA, and Lifetime ISA (max £4,000 of the £20,000 total). All interest, dividends, and growth within an ISA are completely tax-free. You can only subscribe to one of each type per tax year, though you can transfer between providers.

What is the Personal Savings Allowance? ▼

The Personal Savings Allowance (PSA) lets you earn savings interest tax-free outside of an ISA. Basic-rate taxpayers (20%) can earn up to £1,000 in interest tax-free. Higher-rate taxpayers (40%) get £500. Additional-rate taxpayers (45%) get no PSA. If your savings interest exceeds your PSA, you pay tax on the excess at your marginal rate. There is also a starting rate for savings of up to £5,000 at 0%, which is reduced pound for pound by non-savings income above £12,570.

Should I use a Cash ISA or a regular savings account? ▼

It depends on how much interest you earn. If your annual savings interest is below your Personal Savings Allowance (£1,000 basic rate, £500 higher rate), there is no immediate tax advantage to an ISA. However, an ISA protects future growth as your savings grow and interest exceeds the PSA. For higher-rate and additional-rate taxpayers, or anyone with substantial savings, a Cash ISA is almost always worthwhile. Current Cash ISA rates (March 2026) are approximately 4-4.5% AER.

How is interest on savings taxed in the UK? ▼

Savings interest is taxed as income at your marginal rate (20%, 40%, or 45%) but only above your Personal Savings Allowance. Basic-rate taxpayers get £1,000 tax-free, higher-rate get £500, and additional-rate get £0. Interest within an ISA is completely tax-free and does not count towards the PSA. Banks and building societies pay interest gross; HMRC collects any tax owed through your tax code or Self Assessment.

What are the best savings rates in the UK right now? ▼

As of March 2026, typical rates are: easy-access savings approximately 4.5% AER, fixed-rate 1 year approximately 4.8% AER, and Cash ISAs approximately 4.3% AER. Regular saver accounts from high street banks can offer 5-6% AER but cap monthly deposits at £200-£500. Rates change frequently, so always check the latest best-buy tables before opening an account.

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