📉 Inflation Calculator

See what a sum of money is worth in today's pounds — or how inflation will erode future value

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Bank of England target is 2%. Recent UK CPI was higher.

Inflation Impact

Equivalent Value—
Purchasing Power Change—
Total Price Rise—

What is Inflation?

Inflation measures how the general price level of goods and services rises over time, eroding the purchasing power of money. In the UK, inflation is measured by the Consumer Prices Index (CPI), with the Bank of England targeting 2% per year.

Why Does Inflation Matter for Savers?

If your savings account pays 3% interest but inflation is 4%, your money is actually losing purchasing power in real terms — even though the nominal balance is growing. This is why keeping money in a low-interest current account for long periods is effectively losing value.

Recent UK Inflation

UK CPI peaked at over 11% in late 2022 — the highest in 40 years — driven by energy price spikes following the invasion of Ukraine. By 2025 inflation had returned closer to the Bank of England's 2% target, though cumulative price rises since 2020 mean the cost of living remains significantly higher than pre-pandemic levels.

💡 £10,000 in 2015 at 2.5% average inflation would need to be worth approximately £12,800 in 2025 to have the same purchasing power — a stark illustration of why long-term savings rates matter.