Long-Term Savings Calculator | PPF & Fixed Rate Compound Interest UK
Free long-term savings calculator for UK savers. Calculate compound interest returns on regular savings over 15-30 years.
Last updated: February 2026
Long-Term Savings Calculator
Plan your long-term savings strategy with our compound interest calculator. Project how your regular deposits will grow over 15-30 years with annual compounding. Originally designed for PPF (Public Provident Fund) calculations, this tool works for any regular savings scheme including ISAs, pension contributions, and fixed-rate bonds.
See the power of compound interest and understand how starting early can dramatically increase your retirement savings.
Calculate Your Savings Growth
Understanding Compound Interest
Compound interest is often called the "eighth wonder of the world" — and for good reason. Unlike simple interest (which only earns on your original deposit), compound interest earns interest on your interest, creating exponential growth over time.
The Compound Interest Formula:
Future Value = P × [(1 + r)^n - 1] / r × (1 + r)
Where: P = annual deposit, r = annual interest rate, n = number of years
The Power of Starting Early
Consider two savers, both aiming to retire at 65:
| Scenario | Starts Age | Monthly Saving | Years Saving | Total Deposited | Final Value (6%) |
|---|---|---|---|---|---|
| Early Starter | 25 | £200 | 40 years | £96,000 | £393,700 |
| Late Starter | 40 | £400 | 25 years | £120,000 | £277,900 |
UK Long-Term Savings Options
Here are the main tax-efficient savings vehicles available to UK residents:
| Product | Annual Limit (2025/26) | Tax Treatment | Best For |
|---|---|---|---|
| Stocks & Shares ISA | £20,000 | Tax-free growth & withdrawals | Long-term investing (5+ years) |
| Cash ISA | £20,000 | Tax-free interest | Emergency fund, short-term goals |
| Lifetime ISA (LISA) | £4,000 | 25% government bonus + tax-free growth | First home or retirement (18-39 only) |
| Workplace Pension | 100% of earnings (max £60,000) | Tax relief on contributions | Retirement (especially with employer match) |
| SIPP | 100% of earnings (max £60,000) | Tax relief + investment control | Self-employed, advanced investors |
| Junior ISA | £9,000 | Tax-free until child is 18 | Children's savings |
Expected Returns by Investment Type
Different investment strategies offer different risk/return profiles:
| Investment Type | Typical Annual Return | Risk Level | Suitable Period |
|---|---|---|---|
| Cash Savings Account | 3-5% | Very Low | Any (emergency fund) |
| UK Government Bonds (Gilts) | 4-5% | Low | 5+ years |
| Corporate Bonds | 5-7% | Medium-Low | 5+ years |
| Balanced Fund (60/40) | 6-8% | Medium | 10+ years |
| Global Equity Fund | 7-10% | Medium-High | 10+ years |
| Small Cap / Growth Funds | 8-12% | High | 15+ years |
Important: Past performance doesn't guarantee future results. These are historical averages and actual returns can vary significantly year-to-year.
What is PPF (Public Provident Fund)?
PPF is a popular government-backed savings scheme in India offering:
- 15-year lock-in period (extendable in 5-year blocks)
- Government-guaranteed returns (currently around 7.1%)
- Tax benefits under Section 80C
- Tax-free interest and maturity proceeds
While PPF isn't available in the UK, the closest equivalents are:
- Lifetime ISA: 25% government bonus, tax-free growth
- Premium Bonds: Government-backed, prize-based returns
- NS&I Savings Certificates: When available, tax-free fixed returns
- Personal Pension: Tax relief on contributions, locked until 55/57
Understanding PPF and UK Equivalents
The Public Provident Fund (PPF) is a long-term government-backed savings scheme that originated in India in 1968. It has become one of the most popular financial instruments in the Indian subcontinent due to its combination of guaranteed returns, tax benefits, and government backing. While PPF is not available to UK residents, understanding its structure helps highlight the value of disciplined, long-term saving -- a principle that applies equally well to UK savings products.
PPF Key Features
The PPF offers a 15-year lock-in period that can be extended in 5-year blocks after maturity. The current PPF interest rate is set quarterly by the Indian government, and as of 2025 stands at approximately 7.1% per annum, compounded annually. Both the contributions (up to a statutory annual limit) and the maturity proceeds are fully exempt from tax in India, making it a triple-tax-free instrument (commonly referred to as EEE status -- exempt at contribution, growth and withdrawal).
Partial withdrawals are permitted from the seventh financial year onwards, and loans against the PPF balance can be taken between the third and sixth years. These withdrawal rules make PPF less liquid than many UK savings products, but the guaranteed returns compensate for the restricted access.
Historical PPF Interest Rates
| Period | Annual Rate | Trend |
|---|---|---|
| 2000-2003 | 9.5% - 11% | High rate era |
| 2004-2011 | 8.0% | Stable |
| 2012-2016 | 8.1% - 8.8% | Gradual decline |
| 2017-2020 | 7.1% - 8.0% | Linked to bond yields |
| 2021-2025 | 7.1% | Stable |
Comparable UK Savings Products
For UK-based savers seeking similar long-term, disciplined savings structures, several products offer comparable benefits:
- Lifetime ISA (LISA): Available to ages 18-39, the LISA provides a 25% government bonus on contributions up to £4,000 per year. Funds must be used for a first home purchase or accessed after age 60 to avoid penalties. The effective boost from the government bonus mirrors the favourable rates of PPF.
- Workplace Pension (Auto-Enrolment): UK employers must contribute at least 3% of qualifying earnings, with employees contributing 5%, for a combined minimum of 8%. With tax relief and employer matching, the effective return on contributions begins at well over 50% before any investment growth.
- Stocks and Shares ISA: The £20,000 annual ISA allowance shelters investment returns from both capital gains tax and income tax. Over 15-30 year periods, historically diversified equity portfolios have delivered annualised returns of 7-10%, comparable to PPF rates but with more volatility.
- NS&I Premium Bonds: Government-backed with a current prize fund rate of approximately 4.0%. While returns are variable and prize-based rather than guaranteed, the government backing provides security similar to PPF.
Frequently Asked Questions
Compound interest is when you earn interest on both your original deposit and on any interest you've already earned. Over long periods, this creates exponential growth — your money grows faster the longer it's invested. For example, £1,000 at 7% compound interest becomes £1,967 after 10 years and £3,870 after 20 years. This calculator assumes annual compounding, where interest is added once per year.
For most UK savers, the best approach is a combination: 1) Maximise any employer pension match first (free money!), 2) Build an emergency fund in a Cash ISA (3-6 months expenses), 3) Use a Stocks & Shares ISA for long-term goals. The Lifetime ISA is excellent if you're under 40 and saving for a first home or retirement, thanks to the 25% government bonus.
Financial experts typically recommend saving 12-15% of your gross salary for retirement, including any employer contributions. The earlier you start, the less you need to save — someone starting at 25 might need 12%, while starting at 40 might require 20%+ to achieve similar results. Use this calculator to see how different savings rates compound over your working life.
For cash savings, use current rates (typically 4-5%). For stock market investments over 20+ years, historical averages suggest 6-8% after inflation is reasonable. Be conservative in your planning — it's better to be pleasantly surprised than disappointed. Remember that actual returns will vary year-to-year, and past performance doesn't guarantee future results.
No, this calculator shows nominal (not real) returns. To account for inflation, subtract the expected inflation rate from your return rate. For example, if you expect 7% returns and 2.5% inflation, use 4.5% for a more realistic purchasing power projection. UK long-term inflation has averaged around 2-3% historically.
The ISA allowance for 2025/26 is £20,000 per person across all ISA types (Cash, Stocks & Shares, Innovative Finance). Within this, you can contribute up to £4,000 to a Lifetime ISA if you're aged 18-39. The Junior ISA allowance is £9,000. Remember, ISA allowances cannot be carried forward to future tax years.
No, PPF (Public Provident Fund) is specifically an Indian government savings scheme and isn't available to UK residents. However, the UK has similar tax-advantaged savings options including ISAs, LISAs, personal pensions, and NS&I products. This calculator can model returns for any of these using their respective interest rates.
This calculator provides accurate projections based on the inputs you provide, assuming consistent annual deposits and a fixed rate of return with annual compounding. In reality, investment returns fluctuate year-to-year, you may vary your contribution amounts, and fees can reduce returns. Use this as a planning tool rather than a guaranteed prediction.
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Expert Reviewed — This calculator is reviewed by our team of financial experts and updated regularly with the latest UK tax rates and regulations. Last verified: February 2026.
Last updated: February 2026 | Verified with latest UK rates
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Understanding Your Results
Our Ppf Calculator provides:
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- Accurate formulas - Based on official UK standards
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- 2025/26 updated - Using current rates and regulations
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