Timing windows
Delay 1 Year vs 5 Years (How the Cost Changes)
Longer delays remove more compounding time, so the estimated gap usually grows—but it depends on the rate you assume. Here’s a simple 1-year vs 5-year comparison and a calculator link to test your own numbers.
Published: December 22, 2025 · Updated: December 22, 2025 · By FinToolSuite Editorial
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Run start-now vs start-later scenarios with your own rates.
Disclaimer
Educational purposes only; not financial advice. Examples are illustrative; real returns vary and investments can go down as well as up. Fees, taxes, inflation, and provider rules vary.
Quick answer
Five-year delays usually create a larger modeled gap than one-year delays when other inputs stay the same. The assumed rate changes how big the gap looks.
See goal deadline framingSetup (kept constant for fairness)
- Lump sum: £10,000 (illustrative).
- Horizon: 20 years (illustrative).
- Compounding: use your tool default.
- Delays compared: 1 year vs 5 years.
- Rates tested: 3%, 5%, 7% (illustrative).
Illustrative comparison table
Estimated cost of delay for a £10,000 lump sum, 20-year horizon. Values rounded; assumptions only.
| Assumed rate (illustrative) | Cost of delay (1 year) | Cost of delay (5 years) | Difference (5y − 1y) |
|---|---|---|---|
| 3% | ~£526 | ~£2,481 | ~£1,955 |
| 5% | ~£1,263 | ~£5,744 | ~£4,480 |
| 7% | ~£2,532 | ~£11,107 | ~£8,575 |
What the table usually shows
- Longer delays generally increase the modeled gap.
- Higher assumed rates generally increase the gap (sensitivity).
- Longer horizons amplify differences.
- Fees, taxes, and inflation can reduce net outcomes.
How to run this comparison
- Run a 1-year delay scenario at your low/base/high rate.
- Run a 5-year delay scenario with the same rates and horizon.
- Save and compare the six scenarios side-by-side.
- Repeat with adjusted rates if you want a net (after-fee/tax) view.
Goal deadline angle
If you have a deadline (for example, “£X by 2035”), a longer delay can increase the monthly amount needed to reach that target in a model. See more in the goal deadline guide.
Goal deadline framingFAQ
Is a 1-year delay a big deal?
It depends on your assumptions. In the table above, even one year shows a gap; use the calculator to test your numbers.
How much worse is a 5-year delay?
In the illustration, 5 years shows a larger gap than 1 year. The size changes with rate and horizon assumptions.
What return assumption should I use?
Use low/base/high scenarios to see sensitivity. Keep assumptions consistent across the 1-year and 5-year runs.
Does compounding frequency matter?
It can change the exact numbers. Use the same frequency across scenarios for fairness.
Does inflation affect the comparison?
Inflation reduces purchasing power. To approximate, you can test a lower “real” assumption alongside the nominal one.
Do fees and taxes matter?
Yes. They reduce net outcomes. You can model this by lowering the rate assumption to create a net estimate.
Are results guaranteed?
No. These are estimates based on assumptions. Real-world returns can be higher or lower and can be negative.
How do I compare delays fairly?
Keep amount, horizon, frequency, and rate the same. Change only the delay and repeat for your low/base/high assumptions.
Next steps
Run six scenarios: 1-year and 5-year delays at low/base/high assumptions. Save and compare the set side-by-side.