Saving & Investing
See what your money could really be worth in the future.
Estimate how inflation may reduce the future purchasing power of money you hold today, then compare what happens if that money also earns a return.
Inflation & Purchasing Power Calculator
See what a fixed amount of money may be worth in today’s terms.
Your purchasing-power estimate will appear here.
Compare the value your money keeps with the value inflation may erode.
How purchasing power may fall over time
The cash figure stays the same, but its value in today’s money may decline.
These examples show estimated purchasing power after inflation. They are illustrations, not forecasts or recommendations.
Try changing the inflation rate or time period to see how even modest annual inflation can affect long-term buying power.
This calculator uses the latest ONS CPI annual rate as an editable starting example and assumes that rate remains constant for the full projection. Actual inflation changes over time and differs across spending categories. CPIH is shown for context. Return comparisons are illustrative only and do not account for fees, tax, volatility or investment risk.
What determines how much purchasing power you lose?
The effect of inflation on purchasing power is mainly shaped by the amount you start with, the inflation rate assumed and how long that rate persists.
Starting amount
The calculator begins with the amount of money whose future purchasing power you want to understand.
Inflation rate
A higher assumed rate means prices rise more quickly, reducing what the same nominal amount of money can buy.
Time
The longer inflation persists, the greater its cumulative effect on purchasing power can become.
How inflation reduces purchasing power over time
Inflation changes the relationship between the money you hold and the prices you face. The cash amount may stay unchanged while its buying power falls.
Start with today’s money
Begin with a fixed amount and the purchasing power it has at today’s prices.
Prices rise over time
An assumed inflation rate represents the pace at which the general price level increases.
The same amount buys less
If the cash amount does not grow at the same pace, fewer goods and services can be bought with it.
Purchasing power falls
The real value of the money declines even though the nominal cash figure may be unchanged.
Inflation does not normally reduce the number shown in your bank balance. Instead, it reduces what that balance can buy if prices rise faster than your money grows.
Nominal value and real value are not the same
Inflation can make an unchanged cash amount look stable while its real purchasing power is falling. Distinguishing nominal and real value makes that difference clearer.
Nominal vs Real Returns →Nominal value
The amount of money you actually hold. A £10,000 balance is still £10,000 in nominal terms.
Real value
What that money is worth after allowing for changes in purchasing power caused by inflation.
Why the difference matters
A balance can stay the same, or even grow, while its purchasing power still falls if it does not keep pace with inflation.
Inflation is an assumption, not a forecast
The calculator can illustrate the effect of a chosen inflation rate, but future inflation will not necessarily follow one constant path.
Inflation changes over time
The calculator applies the rate you enter as an assumption. Actual inflation can move higher or lower from year to year.
Different prices do not all rise at the same rate
Published inflation measures represent broad baskets of goods and services. Your own spending pattern may therefore feel different from the headline rate.
The result is illustrative
The projection shows what could happen if the assumed rate persisted. It is not a prediction of future inflation or of your personal cost of living.
Use the result to understand sensitivity to inflation rather than treating one assumed rate as a forecast.
Explore your next question
Once you have seen how inflation can change purchasing power, the next useful step is to understand the measure itself, why buying power falls and how growth can be compared with inflation.
Go deeper
Inflation affects purchasing power, savings and investment outcomes in different ways. These guides take the concept further without repeating the calculator.
What Is Inflation and How Does It Work?
Understand what inflation means, how rising prices affect money over time and why purchasing power is central to interpreting inflation.
Read the guide →Common questions about inflation and purchasing power
These answers cover the questions that often arise after comparing inflation and purchasing-power scenarios.
What does the Inflation Calculator show?
It estimates how inflation could reduce the future purchasing power of an amount of money using the amount, inflation rate and time period entered.
What does purchasing power mean?
Purchasing power describes how much goods and services a given amount of money can buy. If prices rise while the cash amount stays unchanged, its purchasing power falls.
Why does inflation reduce purchasing power?
Inflation means the general price level is rising. When prices increase, the same amount of money buys less unless that money grows sufficiently to offset the increase.
Does inflation reduce the amount of money in my account?
Not directly. A £10,000 balance can remain £10,000 in nominal terms while becoming worth less in real terms because prices have risen.
What is the difference between nominal and real value?
Nominal value is the cash amount shown before adjusting for inflation. Real value reflects what that money is worth after allowing for changes in purchasing power.
Is the inflation rate in the calculator a prediction?
No. The rate entered is an assumption used to illustrate how purchasing power could change if that rate persisted. Actual inflation can vary over time.
Does everyone experience the same inflation rate?
No. Official inflation measures use broad baskets of goods and services, while individual households spend money differently. Personal price changes can therefore feel higher or lower than the headline rate.
What is the difference between CPI and RPI?
CPI and RPI are different measures of UK price inflation with different methodologies and coverage. The dedicated CPI vs RPI guide explains those differences in more detail.
Can savings interest offset inflation?
Savings interest can help preserve purchasing power if the effective return keeps pace with inflation, but savings rates and inflation both change over time.
Can investments grow faster than inflation?
Investments can produce returns above inflation over some periods, but returns are uncertain and can also be negative. A calculator can illustrate assumptions but cannot guarantee a real return.