Mortgages & MoneyLive

Inflation Calculator

See how purchasing power changes with inflation over time.

Short answer

Future value = PV × (1 + i)ⁿ. Bank of England's inflation target is 2% — we use that as a default. Past inflation has been higher (avg 3-4% over decades).

Calculation

Amount

Number of years

Annual inflation rate

Direction

Future value (worth in X years)Past value (X years ago = today's £)

Fill in the fields above to see your result instantly.

How it works

Compound inflation: future value = present × (1 + rate)^years. Past value reverses the formula.

Worked example

£100 in 10 years at 2.5%: £128.01. So £100 today buys what £128.01 will need to buy in 2036.

Who should use this

•Retirement planners
•Anyone comparing salaries across decades
•Forecasting savings goals

Common mistakes

×Using a single rate for long historical periods (1970s inflation was 20%+)
×Forgetting that wage growth often offsets inflation

Frequently asked questions

What inflation rate should I use?▾

Bank of England targets 2%. UK long-run average is closer to 2.5-3%. For caution, use 3%.

Related calculators

Compound Interest →Future Value →Retirement Savings →