ISA Calculation

InMyDreams

Another way of thinking about the inflation effect. Rather than looking forward in time, look back. If you were doing the same thing 41 years ago, you would maybe have started putting away £150 / year instead of £3000. You would have been dreaming about how much £150x41, plus all the interest was worth, especially if you could keep 1% above the rate of inflation. But in real terms, if you are now still putting away just £150/year today as you reach that retirement age, it's not going to be making much difference. And whatever notional figure you'd worked out 41 years ago probably won't mean today what you thought it might 41 years ago either, even if it is/was numerically correct.

For this sort of plan, you have to keep upping what you put in year on year. ISAs spent 10 years with the same limits, as has already been pointed out.