Inflation Calculator

The UK Inflation Calculator converts a sum of money from any past year into its equivalent purchasing power today, using official Consumer Prices Index (CPI) data published monthly by the Office for National Statistics. CPI has been the UK headline inflation measure since 2010, replacing the older Retail Prices Index (RPI) for most official purposes. CPI tracks the price of a representative basket of 730+ goods and services, weighted by household spending patterns from the Living Costs and Food Survey, and updated each January to reflect changing consumer habits — recent additions include streaming subscriptions, air fryers and reusable water bottles. The Bank of England has a CPI inflation target of 2%, set by the Treasury, and uses Bank Rate as its main lever. If inflation deviates more than 1 percentage point from target, the Governor must write an open letter to the Chancellor. UK CPI peaked at 11.1% in October 2022 — the highest in 41 years — driven by post-pandemic supply shocks and the energy crisis following the invasion of Ukraine. It has since fallen back toward target, averaging around 2.5% in 2024. Use the calculator to see what £1,000 saved under your mattress in 2000 would buy today (about £530 worth of goods at 2025 prices), to convert a historical wage or house price into today money, or to estimate how much your savings need to grow each year just to keep pace with rising prices. With cash savings, inflation can quietly erode real value: at 3% inflation, £10,000 left in a 1% interest account loses around £200 of real purchasing power every year, even before tax. For financial planning, inflation matters in three big ways. First, the State Pension rises under the Triple Lock — the highest of CPI, average earnings growth or 2.5%. Second, defined benefit pensions are usually inflation-linked but commonly capped at 5%. Third, mortgages and other fixed debt are eroded in real terms by inflation, which historically benefits borrowers when wages keep pace. Some financial commentators also watch core CPI (excluding food, energy, alcohol and tobacco) for underlying price trends.