Finance & Money
Rates & guidance reviewed
Inflation quietly reduces what each pound can buy. A sum that feels comfortable today may cover less in ten or twenty years — and an investment return only helps if it outpaces price rises after costs and tax.
This free calculator projects the future cost of today’s basket of goods, the purchasing power of idle cash, and the real (inflation-adjusted) value of a simple compounded return. Useful for long-term budgeting and savings “what ifs”.
Figures are illustrative. UK CPI/CPIH change over time; enter the Bank of England’s 2% target, a recent average, or a stress-test rate. Not a forecast and not investment advice.
Prefer the written walkthrough? Start with How UK fuel cost is calculated from miles, MPG and the pump price, How UK inflation erodes cash — and what a real return means or How compound interest is calculated on a UK savings pot. Guides match the figures on this page.
Illustrative compound inflation · not an ONS forecast
e.g. 2 for Bank of England target, or your scenario
Optional — use 0 for cash under the mattress
Illustrative only. Ignores tax, fees, variable rates and changing inflation. Not investment advice — past or assumed returns are not a guarantee of future results.
Static sample calculations you can read without using the form. Figures match this tool's maths — always re-run with your own numbers for a personal estimate.
The default: modest growth that still beats inflation in real terms.
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Same figures as the written inflation guide. Real annual return is (1.05 ÷ 1.03) − 1, not 5 − 3.
Long-horizon pot — inflation roughly doubles many price tags.
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Idle cash loses purchasing power when prices rise.
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Same pot as the default, but inflation at the Bank of England’s 2% CPI target.
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Two percentage points of inflation for a decade is the gap between £744.09 and £820.35 of idle-cash purchasing power.
A nominal return is the percentage growth before inflation. A real return is what is left after prices rise — (1 + nominal) ÷ (1 + inflation) − 1. If your savings earn 3% while inflation is 3%, your real return is zero before tax.
Cash under the mattress has a negative real return whenever inflation is positive. Even a current account with low interest can lose purchasing power in real terms.
Worked case: £1,000 left as cash for 10 years at 3% inflation is worth £744.09 in today’s purchasing power here, while the same basket of goods would cost £1,343.92. At a 5% nominal return the pot’s real value is £1,212.05 — still ahead of cash, before tax and fees. Real annual return is 1.94%, not 2%.
The Bank of England’s inflation target is 2% (CPI). ONS CPI in the 12 months to July 2026 was 2.9% (CPIH 3.1%). Those prints move. Long-term planners often use a modest assumption and test a higher “what if” rate. This tool compounds at a constant rate you type — it does not look up ONS. A longer walk-through of the two views of (1 + i)^n, the 1.94% real-return trap, CPI vs CPIH vs RPI, and the rule of 72 is in the written inflation guide.
Always confirm rates, bands and eligibility on official pages. Our tools are simplified estimators for guidance only.