# How much interest do you earn on a million pounds?

**Wondering how much interest you earn on one million pounds? **No matter how you (legally!) made your million pounds, if you’ve got it, you’ll be wanting to know what sort of interest you’re looking at getting back from it.

There are a few things that will affect how much money you’ll make from your million pounds. These are:

**The interest rate**– The higher the interest rate, the more money you’ll make from your million. With a million pounds, even the smallest percentage point change make huge differences. The interest on one million pounds at 1% is £10,000, at 3% you’d get £30,000 and at say 15%, you’d make a whopping £150,000. So you see, the interest rate’s pretty important!**How often your interest is calculated**– Wherever you’ve chosen to invest your million pounds, they’ll pay you your interest either**daily, monthly or yearly**. Why does this matter? Compound interest. If you’re getting smaller amounts of interest frequently, compound interest has more time to do it’s thing. New to compound interest? Read more about it here.**How long you leave your money untouched for**– The longer you can go without touching your money, the more time compound interest (see above) has to, well, compound! This means that when you do eventually want to use some of your money, they’ll be more in the pot. You can then choose whether to skim the interest off every year as an income, take a lump sum out or anything else.

If you **do** have a million pounds, get yourself some professional advice from someone accredited by these guys. The Financial Conduct Authority is there to make sure anyone giving professional financial advice is qualified to do so.

## ✅ Interest on one million pounds

These examples below are what interest you could expect to recieve from your million pounds at varying interest rates.

While right now the interest rates for savers are rather pitiful, there’s no telling what they might do in the future, and these examples, although a bit far fetched now, are real examples of interest rates that have occurred, taken from the Bank of England (source).

### (1980) 17% interest

Compounded yearly

*Your one million pounds at 17% interest annually would give you

**Year 1 – £170,000**

*Leaving your million untouched!

### (1998) 6% interest

Compounded yearly

*Your one million pounds at 6% interest annually would give you

**Year 1 – £60,000**

*Leaving your million untouched!

### (2017) 0.5% interest

Compounded yearly

*Your one million pounds at 0.5% interest annually would give you

**Year 1 – £5,000**

*Leaving your million untouched!

So as you can see, the interest rates make a pretty big difference in the money you’ll get back from your million.

One thing to note is that interest rates can fluctuate throughout the year, so that 17% in 1980 wasn’t for the whole year, unfortunately for savers, and fortunately for borrowers!

## ✅ Can you live off one million pounds?

**Can you live off one million pounds? **Living off one million pounds is possible, but you’d be far from living a millionaires lifestyle.

Take tax and inflation into account and you’d have to watch your pennies carefully.

To live of one million pounds you’d need to have a decent interest rate to start with, but the trouble would be that unless the interest rate happened to be sky high and stayed that way, you’d always be chipping away at the capital amount, meaning your money’s not going to compound.

Assuming the interest rate stayed stable, inflation would mean you’d be able to buy less and loess with your money as time went on.

So would it be possible to live off a million pounds? Yes, if you’re careful plan ahead and don’t have especially luxurious living habits :)

## ✅ Can you retire with one million pounds?

Being able to retire on one million pounds depends largely on how old you are when you retire. If you’re looking to retire really early see the paragraph above!

If you’re at regular retirement age, then yes you could retire on a million, but I think you’d still need to be a little careful with how you spent your money.

Taking money out of your million pounds at a ‘safe rate’ of no more than 3-4% would give you an income of £30-£40,000 annually.

And while today that’s way above the average UK income of £29,600 (source), in years to come, thanks to inflation, it’s going to buy a whole lot less than it does today!

This is also where the age you want to retire comes into play. If you’re going to need 40 years of income from your million pounds, you’re going to need to be far more careful than if you’re looking at 20 years.

## ✅ How much income would 1 million generate UK?

How much income your one million pounds brings in depends. Where you’re keeping it (and any fees they charge) and the average interest rate in a given year are what you need to know to see what sort of income your million will produce.

At it’s most basic, if you’ve decided you don’t want to touch the capital, so you never ‘break into’ your million and only take the interest it creates each year, then it’s easy to work out the income.

If the interest rates say, 2%, your million will give you an income of £20,000 annually. If the interest rates 6%, you could take £60,000 out while leaving the million untouched.

If you **do** have a million pounds, get yourself some professional advice from someone accredited by these guys. The Financial Conduct Authority is there to make sure anyone giving professional financial advice is qualified to do so.

## Related posts you might like

**✅**

*How much income would 1 million generate UK?*If the interest rates say, 2%, your million will give you an income of £20,000 annually. If the interest rates 6%, you could take £60,000 out while leaving the million untouched.

**✅**

*Can you retire with one million pounds?*If you’re at regular retirement age, then yes you could retire on a million.

Taking money out of your million pounds at a ‘safe rate’ of no more than 3-4% would give you an income of £30-£40,000 annually.

**✅**

*Can you live off one million pounds?***Can you live off one million pounds? **Living off one million pounds is possible, but you’d be far from living a millionaires lifestyle.

Take tax and inflation into account and you’d have to watch your pennies carefully.

To live of one million pounds you’d need to have a decent interest rate to start with, but the trouble would be that unless the interest rate happened to be sky high and stayed that way, you’d always be chipping away at the capital amount, meaning your money’s not going to compound.