Dividend reinvestment
Dividend reinvestment (DRIP) calculator
Model reinvested dividends with dividend growth and price appreciation. See your projected passive income, total dividends reinvested, and how your balance compounds year by year.
Project your DRIP portfolio
Dividend yield is applied each period and reinvested; price growth is added separately.
Future value
£425,021
Total contributions
£70,000
Investment growth
£355,021
Projected annual passive income
£14,876
Total dividends reinvested over 25 years: £243,130
Balance over time
Stacked: your contributions vs. compounded growth.
Year-by-year breakdown
| Year | Balance | Contributions | Growth | Dividends |
|---|---|---|---|---|
| 1 | £13,150 | £12,400 | £750.00 | £350.00 |
| 2 | £16,559 | £14,800 | £1,759 | £483.26 |
| 3 | £20,261 | £17,200 | £3,061 | £638.98 |
| 4 | £24,292 | £19,600 | £4,692 | £820.90 |
| 5 | £28,697 | £22,000 | £6,697 | £1,033 |
| 6 | £33,527 | £24,400 | £9,127 | £1,282 |
| 7 | £38,840 | £26,800 | £12,040 | £1,573 |
| 8 | £44,707 | £29,200 | £15,507 | £1,913 |
| 9 | £51,207 | £31,600 | £19,607 | £2,312 |
| 10 | £58,436 | £34,000 | £24,436 | £2,780 |
| 11 | £66,505 | £36,400 | £30,105 | £3,331 |
| 12 | £75,546 | £38,800 | £36,746 | £3,981 |
| 13 | £85,716 | £41,200 | £44,516 | £4,748 |
| 14 | £97,202 | £43,600 | £53,602 | £5,657 |
| 15 | £110,226 | £46,000 | £64,226 | £6,736 |
| 16 | £125,055 | £48,400 | £76,655 | £8,020 |
| 17 | £142,012 | £50,800 | £91,212 | £9,554 |
| 18 | £161,484 | £53,200 | £108,284 | £11,392 |
| 19 | £183,946 | £55,600 | £128,346 | £13,602 |
| 20 | £209,972 | £58,000 | £151,972 | £16,269 |
| 21 | £240,270 | £60,400 | £179,870 | £19,499 |
| 22 | £275,710 | £62,800 | £212,910 | £23,428 |
| 23 | £317,366 | £65,200 | £252,166 | £28,228 |
| 24 | £366,579 | £67,600 | £298,979 | £34,118 |
| 25 | £425,021 | £70,000 | £355,021 | £41,379 |
Why reinvesting dividends matters
Reinvested dividends have historically accounted for a large share of total stock-market returns. By automatically buying more shares, DRIP turns a steady dividend into an accelerating compounding machine — especially when the dividend itself grows each year.
Toggle reinvestment off to compare taking dividends as cash versus letting them compound. The passive-income figure shows what the portfolio could pay you each year at the end of your horizon.
How compounding works
Compounding is growth on growth. Each period, your returns are added to your balance — and the next period earns returns on that larger balance too. Over long horizons this snowball effect dwarfs your original contributions.
A lump sum grows by FV = PV × (1 + r)ⁿ, where r is the periodic rate and n the number of periods. Monthly compounding splits the annual rate into twelve.
Regular deposits form an annuity:FV = PMT × [(1 + r)ⁿ − 1] / r. We add contributions at the end of each period (ordinary annuity).
With DRIP, dividends buy more shares, which pay more dividends. Add dividend growth and your yield on cost rises year after year — the engine behind real passive income.
Why time matters more than rate
Invest £10,000 at 7% with no further deposits and you have roughly £19,672 after 10 years, but about £76,123 after 30 years. The extra two decades did far more than the first one — because each year compounds on an ever-larger base. Starting earlier usually beats trying to earn a higher return.
Pick the right calculator
One engine, four lenses. Each mode tailors the inputs and outputs for a specific question — all using the same correct compounding math.
Ready to put compounding to work?
A projection only matters once you start investing. These are starting points to research a broker or ETF platform that suits you. We are not recommending a specific product — compare fees, eligibility and protections before you commit.
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Frequently asked questions
How does a DRIP calculator work?
A Dividend Reinvestment Plan (DRIP) automatically uses your dividends to buy more shares. Those extra shares pay more dividends, which buy more shares again. This calculator applies your dividend yield to the balance each period, reinvests it, grows the dividend by your chosen dividend-growth rate, and adds any price appreciation on top.
What is dividend growth and yield on cost?
Dividend growth is the rate at which a company raises its dividend each year. Because your original cost stays the same while the dividend rises, your effective yield on the money you invested — your yield on cost — climbs over time, even if the headline yield looks modest.
How is projected passive income calculated?
At the end of the horizon we multiply your ending balance by the dividend yield to estimate the annual passive income the portfolio would produce. With reinvestment switched off, that income would be cash in your pocket each year.
Should I separate price growth from dividend yield?
Yes. In DRIP mode the "price growth" field is capital appreciation only, and the dividend yield is added separately so you can see how much of your total return comes from dividends versus share-price gains.