ISA savings: Britons could boost retirement pot by £25,000 in just five year | Personal Finance | Finance

As inflation remains high, Britons may be wondering how they can make their money go further and reach their investment goals.

Based on monthly contributions of £69 into a Stocks and Shares ISA, with a net growth rate of 3.9 percent, an investor could potentially see the value of their portfolio grow to £25,106 over 20-years. 

Do note though that when investing, capital is at risk.

Research by Fidelity International has revealed how Britons can accumulate returns worth over £25,000 investing over time – over five, 10 and 20 years.‌

Investing £69 a month over a 20-year period could generate potential returns worth over £25,000. Those wanting to achieve their goal sooner could see similar results by investing £171 a month over a 10-year period (£25,129), or £378 a month over a five-year period (£25,079).

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As investors find ways to make their money go further and understand how much they should be investing regularly, the data reveals strategies investors can consider to reach their investment goals.

Ed Monk, associate director for personal investing at Fidelity International, spoke exclusively with Express.co.uk about planning for financial goals in the future.

Start off with clear financial goals

He said: “Setting clear financial goals and knowing how much money is needed to achieve them will give you the most confidence when managing your investments.

“Short term goals like reducing credit card debt or starting an emergency fund to provide yourself with a financial safety net can feel more tangible, and easier to save towards.

“If your goals are longer-term, such as saving for retirement or investing for your children’s future, you might want to set a target for the next six months or how much you want to have set aside by the end of the year to make your goals more specific, measurable and achievable.”

The power of regular top-ups

He explained the power of small amounts can’t be underestimated. Saving as little as £25 a month into an ISA will help savings grow into a sizeable sum over the long term thanks to compound interest.

‌If people are able to put their money away long-term – usually five years or more – the stock market could offer good potential for inflation-beating returns.‌

The impact of inflation

He continued: “With predictions that inflation won’t fall back to the Bank of England’s target for another two years, it‘s key investors are making sure their money works the hardest it can. Stocks and Shares ISAs and pensions are both tax efficient ways of saving.

“While contributing towards a pension means putting away money for the long term, you can invest up to £20,000 into an ISA each year tax-free – think about how you can make the most of this allowance and speak to a financial adviser if you are unsure.”

‌Consider retirement earlier than planned

Knowing what pension provisions people currently have and deciding exactly how they plan to take retirement income is important, even if retirement is a good number of years away.

He concluded: “Ideally, your plans should allow you to cover the of essential spending with income that can meet any changes in the cost of living.

“Look at the different income options available in retirement, be that an annuity or drawdown, and if you are unsure speak to an expert who can help you understand what the different strategies are.”