A future full of interest

SAVING enough money for you to enjoy a comfortable retirement feels like nothing short of a miracle these days.

- By Harvey Jones

But investors have a higher power on their side, known as compounding.

Albert Einstein once dubbed compound interest the "eighth wonder of the world", and for good reason.

Its ability to grow wealth exponentially over time is nothing short of miraculous.

Yet a survey by Hargreaves Lansdown shows almost three-quarters of us underestimate its power.

Joseph Hill, the firm's senior investment analyst, said millions can fall behind in retirement plans as a result: "Compound interest has something in common with other wonders of the world. To most people it's mysterious and beyond comprehension." With huge sums at stake, it's worth taking a little time to understand how this little wonder works because it can transform relatively small sums into something sizeable. There's a catch though. It needs time.