Money available
A₀ = max(0, stated amount − known commitments)Only genuinely spare money enters the framework.
The Next £1 · Methodology
How the calculation works
Apply a transparent sequence to money that remains after essentials, minimum payments and known near-term commitments.
Return to calculatorIncluded
- A user-defined cash floor and fuller cash target
- Priority arrears screening
- Conventional debt and a user-defined APR cutoff
- Employer pension matching as a separate opportunity
- A judgement zone for lower-rate debt, mortgage, cash and investing
Outside this method
- Product or provider recommendations
- A universal emergency-fund target
- Student-loan valuation
- Complete pension tax modelling
- A promise that the sequence is optimal
Calculation
Core formulas
Cash gap
Gap = max(0, chosen cash level − accessible cash)The minimum floor and fuller target are entered by the user.
Approximate debt benefit
First-year interest avoided ≈ repayment × APRActual saving depends on lender timing, charges and the remaining schedule.
Timing convention
When cash flows occur
The calculator allocates sequentially: commitments, minimum cash floor, debt above the user’s cutoff, fuller cash target, then the judgement zone. Employer matching is flagged separately for lump sums.
Limitations
What the result cannot establish
- One debt summary cannot model every repayment schedule.
- Mortgage penalties and overpayment limits require checking.
- Investment returns are uncertain and user supplied.
- Priority debt and insolvency need specialist support.
Reference tests
Numerical checks
| Case | Inputs | Expected result |
|---|---|---|
| Cash floor before conventional debt | £1,000 available; £500 cash gap; £2,000 debt at 18% | £500 to cash floor, then £500 to debt |
Evidence