Inflation / Purchasing Power Calculator
See how the value of money changes over time. Enter an amount, a time period, and an annual inflation rate to find the equivalent value in today's money — or in a future year.
Not sure which rate to use? Here are some UK CPI averages for reference:
| 1990–2000 | ~3.6% avg annual CPI |
| 2000–2010 | ~2.3% avg annual CPI |
| 2010–2020 | ~2.2% avg annual CPI |
| 2020–2024 | ~5.1% avg annual CPI (inc. 2022–23 spike) |
| Long run (1990–2024) | ~2.8% avg annual CPI |
Source: approximate ONS CPI figures. Use as a guide only.
Related: Savings Goal · Pay Rise
How the inflation calculator works
Inflation is the general increase in the price of goods and services over time, which erodes the purchasing power of money. In the UK, inflation is primarily measured by the Consumer Prices Index (CPI), published monthly by the Office for National Statistics (ONS).
To illustrate the effect: £100 in 2000, subjected to 2.5% average annual inflation, is equivalent to approximately £182 in 2025. That means you would need nearly double the money to buy the same things 25 years later.
Inflation affects more than just prices. It reduces the real value of savings if your interest rate does not keep pace. It can erode the real value of wages if pay rises trail inflation. Fixed-rate assets such as bonds also lose real value when inflation is high. The UK experienced a sharp inflation spike in 2022–23, when CPI peaked at over 11% driven by energy prices and supply chain disruptions — the highest rate in over four decades.
Frequently asked questions
How is UK inflation measured?
The Consumer Prices Index (CPI) measures the price change of a basket of goods and services bought by UK households. It is published monthly by the Office for National Statistics (ONS). CPIH is a variant that also includes owner-occupiers' housing costs and is the ONS's preferred headline measure.
What has UK inflation averaged historically?
UK inflation has averaged roughly 2–3% per year over the long run. The Bank of England's official target is 2% CPI. The 2022–23 energy crisis and supply chain pressures pushed CPI above 11% briefly, the highest level in over 40 years.
How does inflation affect my savings?
Your real return on savings is your interest rate minus inflation. If your savings earn 4% but inflation is 3%, your real return is only 1%. If inflation exceeds your savings rate, the purchasing power of your money falls even as the nominal balance grows.
What causes inflation?
Inflation is broadly caused by too much money chasing too few goods. Key drivers include rising energy prices, supply chain disruptions, wage growth, and expansionary monetary policy. The Bank of England raises interest rates to make borrowing more expensive, which reduces spending and brings inflation back down towards its 2% target.