Inflation Calculator

The result shows how much money you would need in future to buy what your amount buys today — how inflation erodes purchasing power. If prices rise 3% a year, cash left idle quietly loses value. It assumes a constant average rate; real inflation varies from year to year.

Why this one is different

It runs both directions from one input: forward to what a purchase will cost, or back from a chosen year to today. The forward view gives both numbers people confuse — what the same goods will cost, and what today’s money will then be worth. The rate is yours to set, not a fixed assumption, and no historical index is implied.

The silent tax

Why £100 under the mattress shrinks every year

Inflation is the quiet erosion of what your money can buy. Cash doesn’t lose its number — it loses its power. A sum that felt comfortable a decade ago may barely stretch today, and the effect compounds relentlessly.

This is why simply saving isn’t always safe: to protect purchasing power, your money usually needs to grow at least as fast as prices rise.

How it works

Inflation compounds: a steady yearly rate means prices rise faster and faster in cash terms — the same arithmetic a compound interest calculator applies to savings, working against you instead of for you. This tool shows two sides of the same coin — how much more the same basket of goods will cost in future, and how much less a fixed sum of today's money will buy by then.

Formula

Future cost = Amount × (1 + rate)ʸ
Real value = Amount ÷ (1 + rate)ʸ

Example calculation

£1,000 at 3% inflation over 10 years:

Future cost = 1,000 × (1.03)¹⁰ = £1,343.92
Real value = 1,000 ÷ (1.03)¹⁰ = £744.09
You'd need £1,344 to buy what £1,000 buys today.

Going back in time

Switch to Back in time and the same arithmetic runs in reverse. Instead of compounding a sum forward, the calculator divides by the accumulated inflation between a past year and today, which answers two related questions at once.

What today's money was worth then. £1,000 now has the buying power that a much smaller sum had in 1985 — useful for judging whether a salary, a house price or a pocket-money figure was really as modest as it sounds.
What an old amount is worth now. The reverse view, which is the one you want when someone quotes a historic price and you need it in today's terms.

Both use a single average rate that you choose. That is a deliberate simplification: real inflation is a jagged series, not a smooth curve, so the result is an honest approximation rather than an exact index lookup. The rate presets under the slider give you sensible starting points, and the ONS calculator linked below gives the precise figure for a specific pair of years.

Worked example — back in time

Comparing £1,000 today with 1985, using the 3.5% long-run preset:

Years elapsed            41
£1,000 today ≈         £244 in 1985
£1,000 in 1985 ≈     £4,098 today
Prices have risen      309.8%
£1 from 1985 is now worth £4.10

The ONS composite price index puts actual UK inflation between 1985 and 2025 at an average of 3.46% a year, so 3.5% is a close and defensible stand-in. Drop the rate to the Bank of England's 2% target and the same £1,000 becomes £444 in 1985 — which shows how much the assumed rate matters over four decades, and why a single average should never be treated as precise.

Frequently asked questions

What inflation rate should I use?＋

Central banks often target around 2%. Historic long-run averages sit a little higher, and some periods spike well above. Try a few rates to see the range.

How accurate is the back-in-time figure?＋

It is an approximation, because it applies one average rate across the whole period rather than the actual year-by-year index. Over short spans that is close; over forty years small differences in the assumed rate compound into large ones. For an exact figure between two specific years, use the ONS composite price index calculator linked in the sources.

Why does money lose value?＋

As prices rise, each pound buys less. That's why cash held under the mattress shrinks in real terms while prices keep climbing.

What was £100 in 1985 worth today?＋

It depends on the rate you assume, because this tool applies one constant rate rather than official CPI history. At an average 3.5% a year over 41 years, £100 becomes £100 × 1.035⁴¹ = about £410 — so roughly four times the cash for the same basket. Enter 1985 to 2026 with your own rate to see the effect of a different assumption.

What is the difference between CPI and RPI?＋

They use different baskets and different formulas, and RPI has historically run above CPI — RPI includes some housing costs and uses a calculation that tends to produce a higher figure. Which index applies matters for index-linked contracts, pensions and rail fares, so check which one your figure is based on.

Why does official inflation not match what I experience?＋

Because the index tracks a basket representing average spending, and your spending is not average. If a large share of your budget goes on categories rising faster than the average, your personal inflation rate is higher than the headline. Both figures can be correct at once.

Does a fall in inflation mean prices are falling?＋

No — it means they are rising more slowly. Prices only fall when inflation goes below zero, which is deflation and is rare. A drop from six per cent to two per cent still leaves everything more expensive than a year earlier, which is why lower inflation often does not feel like relief.