Lump Sum vs Regular Investing Calculator
Sitting on a windfall and wondering whether to invest the lot today or feed it in over a year? This calculator compares the projected growth of a one-off lump sum against the same amount drip-fed monthly into an ISA or SIPP, and shows the gap once you factor in the assumed market return.
How is this calculated?
The lump sum is grown at FV = P × (1 + r)^t. The regular path splits the same total into n equal monthly contributions, each compounded for the remaining time using the future value of an ordinary annuity formula. Since markets are up more often than down, the lump sum wins on average — but the regular path delivers a better outcome in falling markets and reduces regret risk. Returns are gross of charges; ISA and pension wrappers are tax-free at the growth stage.
Frequently Asked Questions
Which approach usually wins?
Historically, lump-sum investing beats pound-cost averaging roughly two-thirds of the time because markets trend upward over long periods, so getting money invested sooner captures more of that drift. The regular approach wins when markets fall during the drip-feed window.
What is pound-cost averaging?
Pound-cost averaging means investing a fixed amount at regular intervals regardless of price. When markets dip, your fixed contribution buys more units; when they rise, fewer. The mathematical effect is a lower average cost per unit than the simple average price, but it doesn't beat lump-sum investing on average.
Does this work inside an ISA?
Yes. Most platforms let you either invest a single £20,000 lump at the start of the tax year or set up a monthly direct debit. Both fit within the same £20,000 annual ISA allowance and benefit from the tax-free wrapper. The choice is purely about timing risk, not tax.
When does drip-feeding make most sense?
When valuations look stretched, when you'd lose sleep watching a one-day market drop hit a freshly-deployed lump sum, or when the money is arriving over time anyway (such as bonus or salary). Behavioural comfort matters — the best plan is the one you'll actually stick to.
Last updated: May 2026 · Rates sourced from HMRC