Inflation Calculator
Calculate how inflation affects your purchasing power over time and see how much money you'll need in the future to maintain today's buying power.
Important Disclaimer: This calculator is for informational purposes only and should not be considered as financial advice. Historical inflation rates are based on UK CPI data, but future inflation rates may differ significantly from historical averages.
Inflation Calculator
About This Calculator
What is inflation?
Inflation is the rate at which the general level of prices for goods and services rises, eroding purchasing power. In simple terms, as inflation increases, every pound buys fewer goods and services.
How does this calculator work?
This calculator uses historical UK Consumer Price Index (CPI) data to show how inflation affects the value of money over time. It calculates:
- Future Value: How much money you would need in the future to have the same purchasing power as your original amount.
- Total Inflation: The cumulative inflation over the selected period.
- Purchasing Power Loss: How much value your original amount would lose over time.
UK Inflation Trends
The UK has experienced varying inflation rates throughout history:
- High inflation in the 1970s and early 1980s (often exceeding 10%)
- Moderate inflation in the 1990s
- Low inflation in the 2000s and 2010s (generally targeting 2%)
- Higher inflation periods during economic crises (2008 financial crisis, 2022-2023 cost of living crisis)
The Bank of England has an inflation target of 2%, which is considered a healthy level for a growing economy.