Inflation Calculator 2026/27
At 3.5% annual inflation, £10,000 today will need to grow to £14,106 in 10 years just to maintain the same purchasing power. Kept in cash at 0%, it loses 30% of its real value. This calculator helps you understand the true cost of inflation on savings, investments, and long-term financial plans.
Figures verified against Bank of England base rate on .
Written by James HartleyCIMA
Calculator
What will today's money be worth in the future at this inflation rate?
UK CPI long-run average ~2.5 to 3%. RPI ~3.5 to 4% (used for student loans). BoE target: 2%.
£10,000 in 10 years will need to be
£14,106
at 3.5% annual inflation over 10 years
Original Amount
£10,000
Cumulative Price Rise
41.1%
Purchasing Power Today
£10,000
Real Value Lost
£4,106
Over 10 years at 3.5%, your money loses 41% of its purchasing power. Cash savings are quietly eroded , investments that beat inflation preserve wealth.
The best defence against inflation is investing in assets that grow faster than prices. A Stocks & Shares ISA has historically returned 7 to 10% per year (before inflation), tax-free.
These insights are generated based on your inputs and general UK financial guidelines. They do not constitute personal financial advice. Always consult a CIMA-qualified accountant or FCA-regulated adviser before making financial decisions.
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How Inflation Calculator 2026/27 Works
What is CPI inflation?
CPI (Consumer Prices Index) measures the average change in prices paid by UK consumers for a basket of goods and services. It is the Bank of England's primary inflation measure and their target is 2%. UK CPI peaked at 11.1% in October 2022 and fell to ~2.5 to 3% by early 2026.
How compound inflation works
Inflation compounds just like interest. At 3.5% per year, £10,000 becomes £14,106 in 10 years and £19,898 in 20 years. This means your savings, pension, and investments must generate returns above the inflation rate to grow in real terms.
CPI vs RPI
CPI excludes housing costs and tends to run ~1 to 2% below RPI (Retail Price Index). RPI is used for UK student loan interest (Plans 2, 5 and Postgraduate) and some index-linked gilts and annuities. Always check which index applies to your specific product.
Frequently Asked Questions
UK CPI inflation was approximately 2.5 to 3% in early 2026, down from a peak of 11.1% in October 2022. The Bank of England targets 2% CPI. RPI typically runs 1 to 2% above CPI.
If your savings rate is 4% AER and inflation is 3%, your real return is approximately 1%. If inflation exceeds your savings rate, your money loses purchasing power in real terms even as the nominal balance grows.
The Rule of 70 estimates how long until inflation halves your purchasing power: 70 ÷ inflation rate = years to halve. At 3.5% inflation, purchasing power halves in approximately 20 years.
Options include: equities (stocks have historically beaten inflation over 10+ years), property, index-linked gilts, Premium Bonds, and inflation-linked savings products. Cash and fixed-rate accounts lose real value when rates are below inflation.
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Official Rates Used
This calculator uses official HMRC rates for 2026/27. View the current rates at GOV.UK:
Rates last verified:
Disclaimer: This calculator provides estimates based on standard HMRC rates for 2026/27. Results may vary based on individual circumstances. This is not financial advice. Always consult a qualified accountant or CIMA-qualified financial adviser for personal tax matters.