Purchasing Power Calculator

What's My Purchasing Power?

Calculate how inflation affects the value of your money over time using official UK inflation data.

Details

£

Enter your details and click calculate to see how inflation has affected your money's value.

The basics

What is purchasing power?

Purchasing power refers to the value of money in terms of the goods and services it can buy. As prices rise due to inflation, the purchasing power of your money decreases.

Inflation measures

About UK inflation measures

This calculator uses official inflation data from the Office for National Statistics (ONS):

CPI (Consumer Price Index)

The UK's main measure of inflation since 1996. It tracks the changing cost of a basket of goods and services, including food, transportation, and recreation, but excludes housing costs like mortgage interest payments. Our data goes back to 1914.

RPI (Retail Price Index)

An older measure that includes housing costs such as mortgage interest payments and council tax. RPI typically shows higher inflation rates than CPI. Data goes back to 1948.

CPIH (Consumer Price Index including owner occupiers' housing costs)

The ONS's preferred measure of inflation since 2017. CPIH extends CPI by adding owner-occupiers' housing costs — the cost of housing services associated with owning and living in your own home. It typically sits between CPI and RPI.

Understanding your result

Real vs nominal value

Nominal value

The face value of money at a given time — the number of pounds in your bank account. Nominal values don't account for what those pounds can actually buy.

Real value

The value of money adjusted for inflation — what your pounds can actually buy. A salary of £30,000 in 2005 had significantly more purchasing power than £30,000 today because prices have risen considerably since then.

Historical context

Key periods in UK inflation history

World War I (1914-1918): Significant inflation during wartime, with rates reaching over 25% in 1917.
Post-WWI Deflation (1921-1923): Sharp deflation with prices falling by up to 14% in 1922.
Great Depression (1929-1933): Period of deflation with falling prices.
World War II (1939-1945): Wartime inflation, particularly in the early years.
Post-War Period (1948-1960s): Relatively moderate inflation with occasional spikes.
1970s: Period of high inflation, peaking at 24.2% in 1975 during the oil crisis.
1980s: High inflation in the early 1980s (18% in 1980) gradually decreased throughout the decade.
1990s: Inflation moderated with the introduction of inflation targeting by the Bank of England. The UK's target is 2% CPI.
2000s: Relatively stable inflation around the 2-3% target, with a spike during the 2008 financial crisis.
2010s: Generally low inflation, with a period of higher inflation following the Brexit referendum.
2020s: Significant inflation spike in 2021-2023 due to pandemic recovery and energy price increases, with CPI reaching 9.1% in 2022.

Planning ahead

How to use this information

Understanding how inflation affects your money can help with:

Long-term financial planning

Ensuring your savings and investments outpace inflation.

Retirement planning

Calculating how much your pension will be worth in real terms.

Salary negotiations

Understanding if your pay rises are keeping pace with inflation.

Investment decisions

Evaluating the real returns on your investments after accounting for inflation.

Historical comparisons

Understanding the relative value of money across different time periods.

Note: This calculator uses historical data and provides estimates based on average inflation rates. The actual purchasing power of money can vary based on specific goods and services, regional differences, and individual spending patterns.

This calculator provides estimates only. This is not financial advice.

Related guide

Put inflation and real value into context

The purchasing power guide explains CPI vs RPI, why inflation changes decision-making and how to compare money across different years.

Read the purchasing power guide