What compounding means here
In this model, any growth stays in the balance and can itself change in later months. A negative growth assumption reduces the balance instead. Real investments fluctuate and can lose value; the constant monthly pattern here does not model that uncertainty.
The monthly amount is the total actually added to the illustrated pot. We do not calculate salary deductions, employer matching, tax relief, pension contribution rules or what you can afford to save. Entering a larger addition does not recommend increasing your pension contributions.
Timing and formula
For annual growth g% and annual percentage fee f%, the monthly growth factor is (1 + g/100) raised to 1/12. The monthly fee factor is (1 − f/100) raised to 1/12. Each month: new balance = previous balance × monthly growth factor × monthly fee factor + monthly addition. The addition arrives at month end and first experiences growth and fees in the next month.
This treats the entered percentages as effective annual factors, spread evenly across twelve months. It does not simply divide annual percentages by twelve. With no additions, twelve months produce the annual growth factor followed by the annual fee factor. Actual schemes can deduct fees differently.
No withdrawals, inflation, fixed charges, transaction costs, tax, contribution limits, employer increases, variable returns, guarantees, insurance, State Pension or defined benefit income are included. This tool does not calculate retirement income, suitability, an annuity or a recommended investment. Bounds keep the model finite and are not expected return ranges. General information, not financial advice.
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Sources and model checks
Educational context and model checked 2026-10-04. Next scheduled review: 2027-04-04. No qualified financial review is claimed. The formula is our explicitly described hypothetical model; these sources do not endorse its assumptions.