Wealth Growth Projector

Wealth projection pulls several pots into one model rather than treating them separately. You start with current net worth, add the monthly contributions you make across a pension, an ISA and ordinary savings, and a different growth rate is applied to each portion according to how it is invested before the total rolls forward year by year. Pension contributions are uplifted for tax relief on the way in and ISA growth is treated as tax-free. Salary rises feed through into larger contributions, an expected windfall or inheritance can be dropped in, a shift from equities into bonds as you age lowers the assumed return, and hitting the ISA or pension contribution limits is picked up as well.

Milestones are worth watching because progress is not linear. The model flags the crossings at £50,000, £100,000, £250,000, £500,000 and £1,000,000, and the first £100,000 is almost always the slowest, since compound growth on a small base contributes so little. Paying in £500 a month at 7% takes roughly 11 years to reach £100,000, another 6 years for the second £100,000 and about 4 years for the third. The same acceleration shows up further out. Starting from £50,000 with £1,000 a month at 6%, you pass £100,000 in year 4, sit near £218,600 by year 10 and reach about £1,050,000 by year 30, of which £410,000 is contributions and £640,000 is growth.

Return assumptions do most of the damage or most of the good, so it helps to know what history has offered. The FTSE All-Share has returned roughly 7% to 9% a year in total return terms over periods of 30 years and more, with the S&P 500 nearer 10% as a global proxy. UK property has delivered 4% to 6% real once rental yield is counted, gilts 3% to 5% nominal and cash 2% to 4% nominal, often negative after inflation. A conventional mix of 60% equities and 40% bonds sits at 5% to 7% nominal. None of that is guaranteed, but 30-year averages make a reasonable planning baseline.

Time matters more than the amount, which is the uncomfortable lesson of any projection. £200 a month at 6% for 40 years reaches £393,000, of which £96,000 is your own money and £297,000 is growth. Run the same payments for 30 years and the figure drops to £196,000. Over 20 years it falls again to £91,500. Each decade of delay roughly halves the eventual pot, so someone who starts at 25 rather than 35 on identical contributions ends up with twice as much at retirement.

Where the money sits changes the answer as much as what it earns. An ISA takes £20,000 a year with all gains and income free of tax for good. The pension annual allowance is £60,000, with relief at your marginal rate going in and 25% available tax-free on the way out, on top of the state pension. A Lifetime ISA, open to the under-40s, takes £4,000 a year and adds a 25% government bonus. A Junior ISA takes £9,000 a year per child and locks it away until 18. EIS and SEIS offer 30% and 50% income tax relief with capital gains exemption, at considerably higher risk. A general investment account is taxable and mostly comes into play once the wrappers are full.

Putting a number on the target keeps the projection honest. The Retirement Living Standards from Pensions UK (formerly the PLSA), updated in June 2026, put a minimum lifestyle at £13,900 a year for a single person and £22,500 for a couple, a moderate one at £32,700 and £45,400, and a comfortable one at £45,400 and £62,700. The full new State Pension pays £12,547.60 a year, about 90% of the single minimum but only 38% of the moderate standard. On a 4% drawdown rule, £25k of income needs a £625k pot and £40k needs £1M. Financial independence, in this model, is the year the portfolio can fund your target spending indefinitely at that withdrawal rate. Against those figures the average pot of £107,300 at 65 recorded by the DWP in 2023 looks thin.

The practical shape of all this changes each decade. Through your twenties the priorities are an emergency fund of about 3 months, taking the full employer pension match, and a Lifetime ISA if a first home is the goal. In your thirties, pension contributions of 15% to 20% of gross salary, a Stocks and Shares ISA and a deposit tend to compete for the same money. Your forties are usually the years for maxing pension and ISA contributions and opening Junior ISAs. In your fifties, catch-up contributions, simplifying holdings and choosing between an annuity and drawdown come to the front. Your sixties bring derisking, the tax-free lump sum and a check on your state pension forecast.