Retire early by maximising your ISA allowance

Most people know what a cash ISA is. If not then see here. However, have you played around with figures to see what could happen if you maximised your annual allowance for a number of years.

Taking a cash ISA allowance only of £3,600 for one person at an interest rate of 5% and using the Halifax Savings Calculator.

Save £300 per month for 10 years = £46,584.68
Save £300 per month for 20 years = £123,310.10
Save £300 per month for 25 years = £178,652.91
Save £300 per month for 30 years = £249,677.59
Save £300 per month for 35 years = £340,827.73
Save £300 per month for 40 years = £457,806.05

Adds up rather quickly doesn't it? But when do you stop? If wanted to live of the interest after 20 years you would have £6,309.06. After 25 years you would have £9,140.50 and after 30 years you would have £12,774.26. If you save you working life of around 40 years you could live off the interest of £23,422.51 per year.

Of course, the above figures do not account for inflation and interest rate deductions or rises.

Haven't got an ISA yet?
Why not?! Take a look on MoneySupermarket an choose an ISA with the greatest interest.

But I don't have enough to maximise my annual allowance of £3,600
Put as much away as you can. Spend more efficently on purchases (eg shopping - write a list and stick to it), use online cash back sites, save extra income revenue in the ISA.