Bureau of Wealth

Inflation Calculator: Future Cost and Buying Power

By the Bureau of Wealth team Updated

This calculator is general information, not financial advice. Check your own figures with the provider or a qualified adviser before acting on them.

Choose whether you want a future price or the future buying power of your money, then enter an amount, a yearly inflation rate and a number of years.

What do you want to know?

The Bank of England's target for CPI inflation is 2%.

Check the highlighted fields to see your results.

What this calculator assumes

  • Inflation runs at the same rate you enter every year. In reality it rises and falls, sometimes sharply, so the result shows what a steady rate would do.
  • The calculator does not use historical Consumer Prices Index data. It looks forward from today using your assumed rate, rather than measuring price changes that have already happened.
  • One rate applies to everything. Prices of individual items, such as energy, rent or childcare, can rise much faster or slower than the average.
  • The effect compounds once a year. Each year's price rise is applied to the price after the previous year's rise.
  • Interest, investment returns, pay rises and tax are not included. The result shows only the effect of rising prices on a fixed amount.

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How the calculator works

Inflation is the rate at which the prices of goods and services rise over time. The calculator applies your yearly rate as compound growth. For a future cost, it multiplies today's amount by one plus the rate, once for each year. For buying power, it does the reverse and divides by the same factor, which shows what a sum in the future would buy in today's money.

The chart and year-by-year figures use the same method for every year up to the one you choose, so you can see the gap growing steadily.

A worked example

At 2% a year, something that costs £1,000 today would cost £1,218.99 in 10 years. Turned the other way, £1,000 in 10 years' time would buy only what £820.35 buys today, a loss of £179.65 in buying power. At 3% the figures are £1,343.92 and £744.09.

Over longer periods the effect is bigger than it feels. At 2% for 25 years, a £1,000 price rises to £1,640.61, and £1,000 then buys what £609.53 buys now. If your household spends £30,000 a year today, the same lifestyle would cost £44,578.42 a year in 20 years at 2%.

Choosing a rate

The Office for National Statistics measures UK inflation with consumer price indices. It describes them as a very large shopping basket of goods and services that people typically buy, and the annual rate of inflation as the percentage change in the index compared with 12 months earlier. The ONS treats CPIH, which adds owner occupiers' housing costs and Council Tax, as its most comprehensive measure.

The government sets the Bank of England's inflation target. In the remit letter to the Bank published on GOV.UK in November 2025, the target is 2% as measured by the 12-month increase in the Consumer Prices Index, and it is symmetric. That is why the calculator starts at 2%. A target is not a forecast, and actual inflation can be well away from it, so try a range, such as 2%, 3% and 4%, before relying on the result.

What the result means for your plans

MoneyHelper explains that if the interest you earn is lower than inflation, your money buys less than it did, even though the balance grows. For long-term goals such as retirement, work in today's money and use a return after inflation, or raise your target by the inflation figure this calculator gives. The ONS also publishes a personal inflation calculator that estimates your own recent inflation rate from how you spend your money.

Related calculators

To see whether your savings can outpace inflation, run the same period through the compound interest calculator. If you are planning to stop working early, the FIRE calculator works in today's money using a return after inflation.

Frequently asked questions

What inflation rate should I use?

Nobody knows the future rate. The Bank of England's 2% target is a reasonable starting point, but test 3% or 4% as well to see how sensitive your plans are.

Can I use this to see what money was worth in the past?

Not accurately. This calculator uses a single assumed rate rather than historical data. For past price changes, use the official index figures published by the ONS.

What is the difference between CPI and CPIH?

CPIH is the CPI plus the costs of owning and living in your own home and Council Tax. The ONS calls CPIH its most comprehensive measure, while the government's inflation target uses CPI.

What is the difference between future cost and buying power?

Future cost shows how much more you would need to pay for the same thing later. Buying power shows how much less a fixed sum will buy, expressed in today's pounds.

How can I protect my savings from inflation?

Compare the AER or expected return you earn with the inflation rate. Money earning less than inflation loses buying power, so for long-term goals you might consider investing, accepting that investments can fall in value.

Sources

Figures come from institutions millions of people rely on. How we keep calculators accurate.