Back in 2020, I started a financial experiment. The beginning of a new decade, during the first year of the COVID-19 pandemic. I wanted to compare the returns on different ways of saving £1,000 over a long period of time. I wanted to see in real pounds and % growth (or loss), how my savings were changing over time, and which savings pots grew the fastest or lost value. This was me putting my money where my mouth is, to show how savings in cash compare to investing and pensions.
This experiment will continue for at least ten years. I’m excited to understand the level of growth in the long term, with interest rates and economic conditions changing. Each savings pot has a different time frame, risk level attached and accessibility. I have money in cash, where returns have changed significantly with changing interest rates. I also have money invested in a Vanguard Stocks and Shares ISA and money invested in a PensionBee pension plan.
On 7th July 2020, I put three lots of £1,000 into three different pots; these have slightly changed over the years depending on investment choices and types of account.
1. Zopa Bank Fixed Saver, then Smart Saver, then Zopa Bank Cash ISA.
2. Vanguard Life Strategy 80% equity fund, Stock and Shares ISA.
3. PensionBee Pension; Tracker fund until Dec 2020, Fossil Fuel Free fund until Nov 2024, then the Climate Plan.
How have these three different methods of savings performed over time and where is the best place for my money? These results are incredible!
Immediate Access Cash Savings
My first £1,000 is held in a Zopa Bank Cash ISA. This account has one of the better interest rates on the market, currently paying 3.5% on 7th July 2025. This is an easy-access account to keep all of my emergency cash savings. The money is available instantly if needed and held in a separate bank from my personal banking, hence creating a barrier to accessibility and making me less likely to dip into or borrow.
This is also the place where I keep all of my spare cash, including my emergency fund to cover three months of my essential expenses. It’s also where I hold my company tax bill reserves.
Interest rates have changed hugely over time. In July 2020, my market-leading rate was 1.05%, in July 2024 it was 5.08%, and now in 2025 it’s 3.5%. But still, the money earned is quite pitiful.
| Cash | Jul-20 | Jul-21 | Jul-22 | Jul-23 | Jul-24 | Jul-25 | Total Growth | Ave Growth |
| Value £ | 1,000 | 1,006 | 1,015 | 1,040 | 1,090 | 1,134 | 134 | 27 |
| Annual Growth £ | 6 | 9 | 25 | 50 | 44 | |||
| Annual Growth % | 0.6% | 0.9% | 2.5% | 4.8% | 4% | 13.4% | 2.7% |
My £1,000 cash balance over five years has earned £134 interest.
A growth rate of 13% over five years or 2.7% per year.
No matter the return, cash is the ideal place to keep your emergency cash and short-term savings. In actual terms, the money grows over time with a small amount of interest; it will never result in an actual cash loss, although with inflation as high as it was 7.9% in July 2023, 9.1% in July 2022, and now lower at 4% at the time of writing in 2025, there are inflationary losses compared to interest earned.
Stocks & Shares ISA
My second choice of saving £1,000 was investing in a Stocks & Shares (S&S) ISA with Vanguard (other investment providers are available; this is the one I chose due to lower fees). A S&S ISA is an investment product, not cash, meaning that it comes with the risk that my money can rise or fall in value, as it did in 2022. S&S ISAs are more suitable for medium-term investing where the money is held for at least five years or longer.
Within my S&S ISA, I invest in a balanced fund of 80% of many company shares and 20% bonds. The value of my investment increases if my funds go up in value, or I make a loss if my investment fund reduces in value.
The money is accessible within a few days if you need it, and to access your cash, you will need to sell your investment. It is not suitable for emergency savings, as you might need that money when markets are down, and you may have lost money on your original investment. Always invest for the medium to long term. You can invest up to £20k a year in a S&S ISA.
I put my £1,000 investment in July 2020 into an 80% Equity LifeStrategy Fund.
| S&S ISA | Jul-20 | Jul-21 | Jul-22 | Jul-23 | Jul-24 | Jul-25 | Total Growth | Ave Growth |
| Value £ | 1,000 | 1,193 | 1,143 | 1,173 | 1,388 | 1,484 | 484 | 97 |
| Annual Growth £ | 193 | -50 | 30 | 215 | 96 | |||
| Annual Growth % | 19.3% | -4.2% | 2.6% | 18.3% | 6.9% | 48.4% | 9.7% |
My £1,000 Vanguard S&S ISA has grown by £484 in five years.
The valuation in July 2025 is £1,484, a total growth of 49% or 10% per year.
I love analysing the performance of my S&S ISA over a longer period; the difference in annual growth is stark and in line with market conditions. The first and fourth-year growth figures are huge and just goes to prove you need to invest for a longer period. A 48% return after five years is strong and shows the gains over cash savings.
But also, my fund lost 4% from July 21 to July 22 with the effects of the lockdown, high interest rate, and high inflation kicking in. That would have been a bad time to sell my investment.
The total growth over the five years is 49%, averaging out to 9.7% per year. The average prudent assumption that I always include in investment growth analysis is 5% per year so this current run rate smashed my assumption, maybe I can start using 7%! Data Sourced from FT.
Despite the fluctuations from year to year, the average growth of 9.7% is hugely better than the cash growth of 2.7% per year. I am happy with this level of growth and intend to increase my savings into my S&S ISA as part of my balanced savings strategy.
PensionBee Pension
My third choice of savings was to put £1,000 into my pension with PensionBee. My private pension is an important long-term savings strategy; the state pension is certainly not enough to live on, see my experiment where I lived off the state pension for a week in 2021. At the beginning of 2024, Faith Archer and I attempted to live on a £246 minimum pension living standard, then a week of moderate spending at £448. Watch my summary on Instagram, it was HARD!
I am currently aged 48 and am unable to access my pension money until the age of 57 (this age increases from 55 to 57 in 2028, but the age might change again depending on government rule changes).
Pension savings, similar to the S&S ISA, are invested into a fund of my choice within the PensionBee fund options. Initially, my pension was invested in the standard low-fee ‘Tracker’ fund. I moved this over to the Fossil Fuel Free fund when it was launched in January 2021. My funds were then transferred into the Climate Plan in December 2024. I am passionate about climate change and all things green and environmental, but does it hurt or help my pension investing by not investing in fossil fuels?
| Pension | Jul-20 | Jul-21 | Jul-22 | Jul-23 | Jul-24 | Jul-25 | Total Growth | Ave Growth |
| Value £ | 1,000 | 1,231 | 1,237 | 1,340 | 1,626 | 1,696 | 696 | 139 |
| Annual Growth £ | 231 | 6 | 103 | 286 | 70 | |||
| Annual Growth % | 23.1% | 0.5% | 8.3% | 21.3% | 4.3% | 69.6% | 13.9% |
My £1,000 saved into my PensionBee Pension has grown by £696 in five years.
The valuation in July 2025 is £1,696, a five-year growth of 70% or 14% per year.
Again, similar movements compared to the S&S ISA, as one would expect with both invested in the stock market. Although my pension has performed significantly better. A point to note here is that I am comparing apples with pears. The investments within my ESG pension are different to the companies in my Vanguard S&S Lifestrategy ISA.
There was a significant growth during year 1 of 23%, not much movement in year 2, 0.5% then another good amount of growth in year 3, 8.3% and another very good year of growth of 21% in year 4. The trend reversed in year 5 with the S&S ISA performing better. This indicates that ethical, fossil fuel-free investing has performed better than my LifeStrategy 80/20 fund, which includes all industries for the first four years.
The total growth over five years is a very impressive 70% or 14% per year, 21% more than my S&S ISA and many times higher than my cash savings. Of course, the disadvantage is that this money is locked away for at least nine years when I turn 57.
The reality of my financial situation is that I have my entire pension pot saved in the PensionBee Climate fund. I need to keep a close eye on these returns after the switch from the Fossil fuel-free plan to the climate plan in December 2024.
A worthy point to add to the pension value growth is the tax benefits of pension contributions. I make my pension contributions via my limited company, an allowable expense, saving me 19% corporation tax. As a self-employed or employed person, you get tax relief at source. If you add £80 to your pension from a personal bank account, HMRC will usually add in another £20 in tax relief, all done via PensionBee.
This means a double win, brilliant growth, and tax-saving benefits. Of course, past performance doesn’t guarantee future performance; the value of shares can go up and down.
Summary of Results
This is one of my favourite financial experiments. This is such an interesting experiment to keep track of over the years, and based on the performance of the past five years, I can see that the returns are much better than cash when I invest in my S&S ISA and much better when I invest in my ESG Pension plan. This has a double-win impact on me; not only am I getting a great return on my money in my pension, but I am also doing good for the world by investing ethically in a way to help save the planet.
I will continue to track this performance for as long as Mrs Mummypenny is here and will also continue to prioritise my overall pension savings (of at least £1000 per month) and my S&S ISA savings (of £500 per month). My emergency fund remains in cash, but that stays at just the three months of essential expenses, which suits my personal attitude to risk.
Please be aware that any form of investment can fluctuate in value. Consider advice from a qualified IFA and ensure they come recommended by a trusted friend and check their investment levels.
