A stocks and shares ISA is one of the simplest ways to build wealth in the UK, because everything inside it grows free of tax, no income tax, no Capital Gains Tax, and tax-free withdrawals. The real power, though, is compounding over time. This table shows what investing a regular monthly amount could grow to over 10, 20 and 30 years, for 2025/26.
The short version
The short version
- You can invest up to £20,000 a year across ISAs, with all growth tax-free.
- Investing £200 a month could grow to around £166,000 over 30 years at 5%.
- Time matters most, the same monthly amount roughly quadruples between 20 and 30 years.
- Returns aren't guaranteed; investments can fall as well as rise.
What regular ISA investing could become (5% a year)
| Monthly amount | After 10 years | After 20 years | After 30 years |
|---|---|---|---|
| £50 | £7,764 | £20,552 | £41,613 |
| £100 | £15,528 | £41,103 | £83,226 |
| £200 | £31,056 | £82,207 | £166,452 |
| £300 | £46,585 | £123,310 | £249,678 |
| £500 | £77,641 | £205,517 | £416,129 |
| £1,000 | £155,282 | £411,034 | £832,259 |
Figures assume 5% annual growth, compounded monthly, and ignore charges and inflation. Model your own plan with the ISA calculator or the compound interest calculator.
Why time beats the amount
Look at the £200-a-month row. After 10 years it's about £31,000, roughly what you paid in plus a bit of growth. But after 30 years it's £166,000, from total contributions of just £72,000. The extra £94,000 is pure compounding: growth earning growth. This is why starting early, even with a small amount, beats waiting until you can afford more.
Key figure
The £20,000 allowance
Every UK adult can put up to £20,000 a year into ISAs, cash, stocks and shares, or a mix. There's no tax on the interest, dividends or growth, and no tax when you withdraw. For long-term goals, a stocks and shares ISA historically outpaces cash, though it carries investment risk.
Watch out
Returns aren't guaranteed The 5% used here is illustrative. Real stock-market returns vary year to year and can be negative, investments can fall as well as rise. Charges and inflation also eat into the headline figure. Use the table to understand the power of compounding, not as a promise of a specific outcome.
Don't overlook the Lifetime ISA
If you're saving for a first home or retirement and you're under 40, a Lifetime ISA adds a 25% government bonus on up to £4,000 a year (within your £20,000 allowance), free money on top of any growth. The Lifetime ISA calculator shows the bonus and the rules.
Questions
Frequently asked questions
At 5% a year, roughly £15,500 over 10 years, £41,000 over 20 years, or £83,000 over 30 years, tax-free.
Up to £20,000 across all your ISAs combined in 2025/26, with tax-free growth and withdrawals.
Over the long term it historically grows faster, but it carries investment risk, values can fall. Cash ISAs are safer but usually grow more slowly.
No. Growth, dividends and interest inside an ISA are tax-free, and withdrawals are tax-free at any age.
Compounding. Growth earns its own growth over time, so the longer you invest, the more the total outpaces what you actually paid in.
Figures are illustrative estimates at 5% growth and ignore charges and inflation. Investments can fall as well as rise, consider regulated advice for big decisions.