Let’s say you put aside £85,000 and left it for 30 years.
If you kept it in cash earning an average rate of 2.20% AER, it might grow to around £163,000 – a modest return, but unlikely to keep up with inflation over time.
Now suppose you invested that money and earned 8% a year (in line with long-term stock market averages). The picture changes:
With a low annual fee of 0.45%, your pot could grow to around £755,000
But with zero fees, like Prosper offers, it could grow to over £850,000
That’s an extra £100,000+ simply from removing fees – and a difference of nearly £700,000 compared to leaving it in cash.
These figures are illustrative and assume no additional contributions. Actual returns may vary and uninvested cash doesn’t earn interest.
Investing involves risk and reward. The value of investments may rise or fall.
Based on a one-time £85,000 investment. Cash grows at 2.20% AER; investments grow at 8% per year with returns compounded annually. One scenario includes a 0.45% annual fee.