Inflation Calculator
Real Value of Money ⚡
See how inflation erodes purchasing power over time — or work out what today's money will be worth in the future.
See how inflation erodes purchasing power over time — or work out what today's money will be worth in the future.
Inflation is the rate at which prices rise over time, which means the purchasing power of money falls. If inflation is 2.5% per year, something that costs £100 today will cost roughly £102.50 next year. Over longer periods, even moderate inflation significantly erodes what your money can buy. The Bank of England targets an inflation rate of 2% per year as measured by the Consumer Prices Index (CPI).
Past → Today: Enter an amount from the past and the number of years ago. The calculator shows what that amount is equivalent to in today's money, using compound inflation.
Today → Future: Enter today's amount and a future time period to see how much purchasing power that money will have lost — or what today's prices will look like in the future.
Formula: Future Value = Amount × (1 + inflation rate)^years
For historical calculations, the UK's long-run average CPI inflation is around 2.5–3% per year. For recent years, UK CPI peaked above 11% in 2022 before returning towards the 2% target. For future projections, the Bank of England's 2% target is a reasonable assumption for planning purposes, though actual inflation may differ.
What is CPI?
CPI (Consumer Prices Index) is the UK's main measure of inflation, tracking the change in prices of a basket of goods and services typically bought by households. It is used by the Bank of England to set interest rate policy.
What is RPI?
RPI (Retail Prices Index) is an older inflation measure that includes housing costs such as mortgage interest payments. RPI tends to run slightly higher than CPI. Some index-linked products, such as gilts and rail fares, still use RPI.
How does inflation affect savings?
If your savings account pays less interest than the rate of inflation, the real value of your savings is declining — even though the nominal balance grows. For example, savings earning 2% AER when inflation is 4% are losing purchasing power at around 2% per year.
What was UK inflation in recent years?
UK CPI averaged around 2% before 2021. It rose sharply to over 11% in late 2022, driven by energy prices and supply chain disruptions following the pandemic and the conflict in Ukraine, before falling back towards the 2% target.