Inflation Calculator
What an amount was worth then, what it is worth now, and what today's money will buy later. You set the rate, so it works for any country.
In short
To adjust for inflation, multiply by one plus the annual rate, raised to the number of years. At three percent a year, one hundred pounds from twenty years ago has the buying power of about one hundred and eighty one pounds today. Prices roughly double every twenty four years at three percent.
Last reviewed
Runs entirely in your browser. Nothing you type here is uploaded, stored or logged.
The formula
future value = amount × (1 + rate)^years
past value in today's money = amount × (1 + rate)^yearsThe two are the same calculation. Going forward tells you what something will cost; going backward tells you what an old amount is worth in money you recognise. Both are just compounding, and compounding is the part people underestimate.
Twenty years at 3% is not 60%. It is 81%, because year two applies to a figure that already grew in year one. Over long periods the gap between the intuitive answer and the real one becomes enormous.
The rule of 72
Divide 72 by the annual rate and you get the number of years for prices to double. At 3% that is 24 years; at 6% it is 12; at 9% it is 8. The approximation holds well for any rate under about 15% and is easy to do in your head, which is why it has survived for centuries.
It works in the other direction too. If your savings earn 1% while inflation runs at 4%, you are losing about 3% a year in real terms, and 72 divided by 3 says your money halves in buying power in roughly 24 years.
Why the headline rate never matches your experience
Official inflation measures a fixed basket of goods weighted to average household spending. You are not an average household. If rent is half your outgoings and rent rose 8% while the index rose 3%, your personal inflation rate was far above the headline and the statisticians were not wrong.
Two other effects widen the gap. Substitution assumes people switch to cheaper alternatives when prices rise, which lowers the measured figure but reflects a real drop in what you enjoy. And quality adjustment reduces the recorded price rise of goods that improved, so a phone that costs more but does more may count as cheaper.
None of this is manipulation. It is what happens when you compress millions of prices into one number. Just do not expect that number to describe your life.
What it means for savings
Money in an account earning less than inflation is shrinking, quietly and without any statement ever showing a loss. This is the single most common financial mistake, precisely because nothing appears to go wrong.
A savings account at 1.5% while inflation runs at 3.5% loses 2% of its buying power every year. Over a decade that is roughly a fifth of the value gone, with the balance on the statement never once going down.
The break-even figure above is the return you would need just to stand still. Anything less is a real loss, however comfortable the nominal number looks.
What it means for salaries
A pay rise below inflation is a pay cut. If prices rose 4% and your salary rose 2%, you can buy less than you could last year, and the fact that the number went up does not change that.
This is worth calculating before a review rather than after. Knowing that you need 4% simply to stay level reframes the conversation from what feels generous to what keeps you where you were.
A caution about long horizons
Projecting fifty years at a fixed rate produces impressive numbers and very little knowledge. Inflation is not stable: it ran near zero in parts of the 2010s and above 10% in parts of the 1970s and 2020s. A single average smooths away exactly the variation that determines how a plan actually turns out.
Use it for the shape of the thing, not the digits. The useful lesson is that a fifty year horizon changes prices beyond recognition, not that a coffee will cost precisely 9.47.
Frequently asked questions
How is inflation calculated over several years?
It compounds. Multiply the amount by one plus the annual rate, raised to the number of years. Ten years at 3% is not 30% but 34.4%, because each year applies to a total that already includes the previous year.
What rate should I use?
Central banks in most developed economies target around 2%. Long-run averages tend to sit between 2.5% and 3.5% once inflationary periods are included. If you are planning conservatively, use 3%; if you lived through the early 2020s, you already know the average hides a lot.
Why does official inflation feel lower than my costs?
Because the index measures an average basket and you do not buy the average basket. If your spending is weighted towards rent, energy and food, and those rise faster than electronics and clothing, your personal rate is genuinely higher than the headline. Both numbers are correct.
How long until prices double?
Divide 72 by the rate. At 3% prices double in about 24 years, at 6% in about 12, and at 2% in about 36. The rule of 72 is accurate to within a few percent for any rate under about 15%.
Does this use real historical data?
No, and that is deliberate. It applies a rate you choose, so it works for any country, any currency and any assumption about the future. For official past figures, use your national statistics office, which publishes the actual index for each month.