What inflation does to your money
The short answer
Inflation is the rise in prices over time, so the same amount of money buys less. To compare money from two different years, multiply it by how much prices rose in between. £100 in 2000 had the same buying power as £188.01 in 2025, on the ONS’s lead measure of prices, CPIH: prices rose 88% in 25 years, about 2.6% a year. RPI, an older measure, rises faster and gives £236.47.
How it’s worked out
The Office for National Statistics publishes price indices: one number for each year that tracks the cost of a typical basket of goods and services. Comparing two years is a straight ratio:
value in the later year = amount × index in the later year ÷ index in the earlier year
CPIH stood at 73.4 in 2000 and 138.0 in 2025 (2015 = 100), so £100 × 138.0 ÷ 73.4 = £188.01. The calculator uses each year’s average, so it compares a whole year’s prices with another’s rather than one particular month.
Worked example
What £100 from each year would need to be in 2025 to buy the same:
| £100 in | In 2025 money | A year, on average |
|---|---|---|
| 1950 | £3,658.66 | 4.9% |
| 1970 | £1,651.65 | 5.2% |
| 1990 | £250.45 | 2.7% |
| 2000 | £188.01 | 2.6% |
| 2010 | £153.16 | 2.9% |
| 2020 | £126.72 | 4.9% |
Before 1988 these use the RPI-linked long-run series, and CPIH after it. Prices rose fastest in the 1970s and early 1980s, and again in 2022 and 2023: £100 of 2020 prices cost £126.72 by 2025, more than a quarter more in five years.
CPIH, CPI or RPI?
- CPIH is the ONS’s lead measure of inflation. It includes the costs of owning a home, measured by what it would cost to rent an equivalent one, and council tax. It starts in 1988.
- CPI is the same without those housing costs, and the measure the Bank of England targets at 2%. It’s the figure most often reported as “inflation” in the news. £100 in 2000 is £190.37 in 2025 on CPI.
- RPI is the oldest measure and reaches back furthest. It rises faster than CPI, partly because of the way it averages prices, and is no longer an official National Statistic, though it’s still used for some things, such as student loan interest. £100 in 2000 is £236.47 in 2025 on RPI.
To reach further back than 1988, the calculator joins the long-run RPI series to CPIH at 1988, unless you choose otherwise. Any two years from 1988 on give the same answer as CPIH alone.
Pay and savings
Pay. A salary of £25,000 in 2010 would need to be £38,291 in 2025 to buy the same. A pay rise smaller than inflation is a pay cut in what your money buys.
Savings. Money earning 3% while prices rise 4% loses buying power, however much the balance grows. The rate that matters is the interest rate less inflation, and less any tax on the interest. The compound interest calculator shows the growth; take inflation off to see what it’s worth in today’s money.
Pensions. A pension pot quoted in 30 years’ time is worth less than the same figure today. The pension calculator shows its pot in today’s money for that reason.
What the figures can’t tell you
An index tracks an average basket. Your own costs may rise faster or slower, depending on how much of your money goes on rent, energy, food or travel. And over very long periods the basket itself changes: few people in 1950 paid for a phone contract, a car or broadband. A long-run comparison says roughly how much buying power has changed, not what any one thing cost.
Work it out with your own figures
Compare any amount between two years, from 1751 to 2025.
Open the Inflation CalculatorNext step: see whether your savings are growing faster than prices.