Compound Interest

Effects of Compound Interest

The value of pensions and the income they produce can fall as well as rise. You may get back less than you invested.

Tax treatment varies according to individual circumstances and is subject to change.

The effects of compound interest are remarkable over 5, 15 or even 50 years if you start early enough. For example, at just 7.5% pa compound interest you will have achieved a 43% increase in your money after 5 years. After 15 years it will be worth 3 times your investment and after 50 years, a staggering 37 times your original investment. No matter how old you are you should be contributing towards your retirement.

retirement planning graph

Many people have switched their main retirement savings towards property (buy-to-let) and ISAs over the last few years. With the recent budget changes we believe every one of us should be relooking at our retirement savings arrangements as pensions are now a much more attractive and flexible savings vehicle than before.