Growth calculators are useful right up to the moment you forget what they assume. Most default to a fixed annual return, no fees and no tax — three things that never hold in practice, and each one flatters the result.
Start with the contributions
Regular contributions usually matter more than the rate you pick, particularly over the first decade. Doubling your monthly contribution has a larger and far more reliable effect than finding an extra percentage point of return, and it is entirely within your control.
The inputs that actually matter
- Starting balance — what you are beginning with today
- Regular contribution — the monthly or annual amount, and whether it rises with inflation
- Growth rate — an annual return you would be comfortable defending to a sceptic
- Charges — platform and fund fees, which compound against you exactly as returns compound for you
- Time horizon — the single most powerful input in the model
- Tax treatment — ISA, pension or general investment account all behave differently
Stress-test before you trust it
Run the projection three times: at the rate you expect, two percentage points lower, and with a flat period in the middle. If your plan only works in the first scenario, it is not a plan, it is a hope.
A projection is not a forecast. It is an arithmetic consequence of the assumptions you fed it, and it is only as honest as they are.
A worked comparison
| Assumption | Optimistic | Realistic |
|---|---|---|
| Annual return | 8% | 5.5% |
| Annual charges | Ignored | 0.9% |
| Contribution increases | Assumed | Flat |
| Tax on withdrawal | Ignored | Modelled |
The gap between those two columns over twenty years is routinely large enough to change the decision entirely — not by a rounding error, but by a materially different retirement date.
Then check the wrapper
- Confirm you are using your ISA allowance before a general investment account.
- Check whether pension contributions would attract relief at your marginal rate.
- For company owners, compare employer pension contributions against dividends.
- Revisit annually — allowances and thresholds change more often than your plan does.
A calculator is a good way to understand the shape of a decision. It is a poor way to make one on its own. Use it to narrow the question, then get the tax treatment checked before you commit.