How to calculate your savings goal
The required monthly amount depends on four numbers: your target, your timeframe, your current savings, and the interest rate your account pays. The calculator projects your current balance forward at the interest rate and then solves for the monthly contribution that closes the gap. Saving £10,000 over 3 years from a zero starting balance at 4% interest requires about £260 a month — of which around £615 comes from interest over the three years. Extend the timeframe to 5 years and the monthly amount drops to around £150; interest does more of the heavy lifting because it has more time to compound.
Tips for reaching your savings target
- Pay yourself first: set up a standing order for the day after payday so the money leaves your current account before you have the chance to spend it.
- Automate everything: manual transfers rely on willpower. Standing orders don't.
- Round-up apps: Monzo's Pots and round-ups, Starling Spaces, and similar features in most challenger apps round every card transaction up to the nearest pound and move the difference into savings. Painless, and usually adds £20–£50 a month.
- Name the pot: labelling an account "House deposit 2028" makes you far less likely to dip into it than if it's called "Savings 2".
- Review every 6 months: re-run this calculator with your current balance to see if you're on track, ahead, or behind. Small course corrections beat last-minute panic.
Where to put your savings
Match the account to the timeframe. For money you might need in the next 12 months, prioritise easy access — challenger banks usually top the tables. For 1–5 year goals, fixed-term bonds pay more but lock your money away; a cash ISA keeps the interest tax-free up to your £20,000 annual ISA allowance. For 5+ year goals, consider a stocks & shares ISA with a diversified index fund — long-run returns have historically outpaced cash savings, though with year-to-year volatility.
A Lifetime ISA is worth a special look if you're saving for a first home (property value ≤ £450,000) or retirement at age 60+. The government adds a 25% bonus on contributions up to £4,000 a year — a free £1,000 if you can max it out. Withdraw for any other reason before age 60 and you pay a 25% penalty on the full balance, which effectively claws back the bonus and a chunk of your own money.