Monthly savings for £5,000 in 10 years
Two scenarios — zero interest vs 5% AER.
Short answer
£42/month cash, or £32/month in a 5% AER account.
Breakdown
- Total months: 120
- Cash-only plan: £42 × 120 = £5,040
- 5% AER plan: £32/month (compound growth does some of the work)
- Interest earned over 10 years at 5%: ~£1,160
Other rates on the same target
- 3% AER (typical easy-access): ~£36/month
- 4% AER (competitive easy-access): ~£34/month
- 7% (long-run equity tracker): ~£29/month
Weekly & daily equivalents
- Per week (cash): ~£10
- Per day (cash): ~£1
- Per week (5% AER): ~£7
If you can only save less
Saving £29/month instead — 70% of the target rate — still reaches roughly £3,528 in 10 years (cash) or £3,500 at 5% AER. A smaller amount you sustain every month almost always outperforms a larger pledge that collapses in month four.
Where to keep this money
For a 10-year horizon, a Stocks & Shares ISA invested in a global equity tracker has historically outperformed cash by a wide margin over decade-long horizons. Cash drags the real return down once inflation is accounted for.
Inflation-adjusted target
At 3% long-run inflation, £5,000 in 10 years' time is worth roughly £3,720 in today's money. To preserve real purchasing power you'd actually need to hit £6,720 in 10 years — about £14/month extra on the cash plan. A 5% AER account broadly keeps pace with inflation; a 3% account does not.