Dollar Cost Averaging Calculator
Estimate the future value of your investments using regular contributions. See how compound interest and pound cost averaging can grow your wealth over time.
Project Your Portfolio Value
Enter your initial investment, regular contribution amount, and expected annual return to see how your wealth could grow over time.
Investment & Growth Details
Enter your planned investment strategy
Growth Evaluation
Estimated future portfolio value and returns
Historical Average Annual Returns
Long-term historical average annual returns (before inflation) for major asset classes to help set realistic expectations.
| Asset Class | Risk Level | Avg. Annual Return | Best Use Case |
|---|---|---|---|
| Global Equity Index | High | 7% – 10% | Long-term growth (10+ years) |
| UK Equity Index | High | 6% – 9% | Long-term growth (10+ years) |
| Global Bond Fund | Medium | 3% – 5% | Capital preservation & income |
| Cash / Savings | Low | 1% – 4% | Emergency fund / short-term |
Dollar Cost Averaging FAQ
Everything you need to know about regular investing, compound interest, and building long-term wealth.
Dollar cost averaging (known as pound cost averaging in the UK) is an investment strategy where you invest a fixed amount of money at regular intervals, regardless of market conditions. This reduces the impact of volatility and removes the emotional stress of trying to ‘time the market’.
Historically, lump sum investing often yields higher returns because markets tend to rise over time. However, dollar cost averaging reduces risk and volatility, making it a psychologically easier and safer strategy for many investors, especially during uncertain market conditions.
The calculator assumes that your investment returns are reinvested. This means you earn returns not only on your initial capital and regular contributions, but also on the accumulated returns from previous periods, leading to exponential growth over time.
Historically, a globally diversified stock market index fund has returned an average of 7% to 10% per year before inflation. Bond funds typically return 3% to 5%, while cash savings accounts vary based on the Bank of England base rate. Always use conservative estimates for planning.