UK Inflation Calculator

Inflation changes what your money can buy. A weekly shop, rent, energy bill or holiday fund can look affordable today, then feel tighter a few years later because prices have risen. This UK inflation calculator shows what an amount today could cost in future using the annual inflation rate you enter. It also shows the extra cost and the reduced buying power of the same cash amount.

How to use this inflation calculator

Enter the amount you want to test, the annual inflation rate, and the number of years. For example, you might enter £1,000, 3% inflation and 5 years. The calculator then compounds that rate each year and shows the estimated future cost. If you are checking your savings plan, compare this with our savings goal calculator or compound interest calculator. If you want to see how rising prices affect household resilience, the emergency fund calculator can help you update your target.

The formula explained in plain English

The method is compound growth. The formula is future cost equals today's amount multiplied by one plus the annual inflation rate, raised to the number of years. With 3% inflation, the multiplier after one year is 1.03. After two years it is 1.03 multiplied by 1.03. That second increase is applied to the already higher price, which is why inflation over several years is not just the annual rate multiplied by the number of years.

The Office for National Statistics publishes official UK inflation measures, including CPI and CPIH. Those figures are averages across a basket of goods and services. Your personal inflation can differ if you spend more than average on rent, fuel, childcare, food or energy. Treat this calculator as a flexible scenario tool. Put in the rate you want to test, then adjust it to see how sensitive your budget is.

Worked example

Suppose a household spends £1,000 a month on a mix of food, bills and transport. If those costs rose by 3% a year for 5 years, the future monthly cost would be £1,159.27. That is an extra £159.27 a month. The same £1,000 kept as cash would have buying power of about £862.61 in today's terms after those 5 years. This is why inflation matters when planning longer goals, such as a deposit, retirement pot or emergency savings.

Common mistakes people make

The first mistake is using the latest inflation figure as if it will stay fixed for years. Inflation moves around. A single rate is useful for a scenario, not a promise. The second mistake is ignoring compounding. Small annual increases can become meaningful when they stack up year after year. The third mistake is comparing savings interest with inflation before tax, fees or account limits. For savings and ISA planning, read our compound interest explained guide and ISA guide UK 2026/27.

Related calculators

Use the compound interest calculator to compare inflation with savings growth. The savings goal calculator helps turn a future price into a monthly saving target. The emergency fund calculator is useful when bills have risen and your old safety buffer no longer feels enough.