Inflation Calculator
Calculate the real value of money after inflation. See how purchasing power changes and what future prices will look like.
The Compounding Effect
At 3% annual inflation, prices double roughly every 24 years (Rule of 72: 72 ÷ 3 = 24). The UK inflation rate over the last century has averaged ~3.5%. Over 30 years at 3.5%, £10,000 in today's money would need to become £28,000 just to have the same purchasing power.
Real vs Nominal Returns
A 7% investment return with 3% inflation has a real return of approximately 4% (nominal − inflation). Always evaluate investment returns in real terms — nominal returns can look impressive while hiding real value destruction.
What This Means for Savings
Cash in a bank account earning less than the inflation rate is losing real value every year. This is why long-term savings need growth-oriented investments, not just savings accounts — especially for goals 10+ years away.
When to Seek Financial Advice
Calculator results provide estimates based on stated inputs and should not replace professional financial advice for significant decisions. Free, regulated financial guidance is available through MoneyHelper (moneyhelper.org.uk, 0800 011 3797) for general money queries. Regulated independent financial advisers (IFAs) — find one at unbiased.co.uk — provide personalised advice on mortgages, pensions, investments, and insurance. Advice fees are typically £150-350 per hour or a percentage of assets
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