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Inflation Calculator UK
Estimate how inflation could change future prices and reduce the real purchasing power of your money over time.
Future cost estimate
Purchasing power view
User-entered inflation rate
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Calculate the effect of inflation
Enter an amount, inflation rate and number of years. The calculator can show either a future equivalent cost or the future purchasing power of today’s money.
The amount you want to compare.
Annual inflation assumption as a percentage.
Projection period in years.
Choose whether to project prices forward or value backwards.
How to use this calculator
- Enter the current amount you want to test.
- Add your assumed annual inflation rate.
- Choose the number of years.
- Switch between future cost and purchasing power to see both sides of inflation.
What your inflation result means
The future cost estimate shows how much an item or amount may need to be in the future to have the same buying power as today.
The purchasing power figure shows what today’s money may effectively be worth in future terms after inflation is applied.
Projection warning: inflation varies over time and your personal inflation rate may be different from headline inflation figures.
Want to protect long-term savings?
Compare inflation with compound growth to see whether your savings or investments may be keeping up in real terms.
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How inflation works
Inflation means prices rise over time. When prices rise, the same amount of money usually buys less than it did before.
This matters for savings, wages, pensions and long-term goals. A cash balance may look the same on paper, but if prices rise faster than the interest earned, the real value of the money can fall.
The calculator uses a steady annual inflation assumption. Real inflation is not usually smooth. Some years may have high inflation and others may be lower.
When comparing savings and investments, it can be useful to separate nominal return from real return. Nominal return is the headline growth rate. Real return is what remains after inflation.
What affects your inflation result
- Starting amount: larger amounts show a larger pound-value change.
- Inflation rate: a higher annual rate increases future costs and reduces purchasing power more quickly.
- Time period: inflation compounds over time, so long periods can make the effect much larger.
- Personal spending: your own inflation experience may differ from official averages.
- Interest and growth: savings or investment returns can offset inflation if they are high enough.
Inflation calculator formula
The calculator compounds the inflation rate over the selected number of years.
future_cost =
amount × (1 + inflation_rate)^years
purchasing_power =
amount ÷ (1 + inflation_rate)^years
value_lost =
amount - purchasing_power
inflation_multiplier =
(1 + inflation_rate)^years
Inflation example
This table shows why even a modest annual inflation rate can matter over long periods.
| Example | Shorter period | Longer period |
|---|---|---|
| Starting amount | £1,000 | £1,000 |
| Inflation rate | 3% | 3% |
| Period | 5 years | 20 years |
| Meaning | The effect is noticeable but modest. | The same money may buy much less in real terms. |
Inflation calculator FAQs
What does an inflation calculator show?
It estimates how prices may rise over time or how the purchasing power of money may fall based on the inflation rate you enter.
Is the result guaranteed?
No. It is a projection. Actual inflation can be higher or lower than your assumption.
What is purchasing power?
Purchasing power is what your money can buy. If prices rise, the same amount of money usually buys less.
Can inflation be negative?
Yes. Negative inflation is deflation, where prices fall. This calculator allows negative inflation for modelling purposes.
Should I use CPI as the inflation rate?
CPI can be a useful reference, but your personal inflation rate may differ depending on your spending pattern.
Key terms used in this calculator
These glossary pages explain the main terms used when thinking about inflation, real value and long-term planning.