To find what a sum of money from an earlier year is worth today, multiply it by the CPI index of the later year and divide by the index of the earlier year. Using ONS annual averages, £1,000 in 2000 is equivalent to about £1,903.71 in 2025.
What inflation measures
Inflation is the rate at which the general level of prices rises. In the UK, the headline measure is the Consumer Prices Index (CPI), which tracks the price of a typical basket of goods and services. The Bank of England says the government sets it a target of keeping inflation at 2%, measured by CPI. A related measure, CPIH, includes owner occupiers’ housing costs and council tax, which CPI leaves out.
The figures here use the ONS CPI index, series D7BT, with 2015 set to 100. The index for a year is the average of its months, and the data runs to 2025.
The formula
Value in the later year = amount × (index later ÷ index earlier).
- 2000 index: 72.7
- 2025 index: 138.4
- £1,000 × 138.4 ÷ 72.7 = £1,903.71
The price level rose by 90.4% over those 25 years. To compare periods, work out the average annual rate: (138.4 ÷ 72.7) to the power of 1 ÷ 25, minus 1, which is 2.61% a year. That is a compound rate, as in Compound interest explained, with examples.
Going backwards
You can also ask what a modern amount would have meant in an earlier year. £100 in 2025 buys what £35.84 bought in 1988, because the 1988 index is 49.6 and the 2025 index is 138.4. Equally, £1,000 in 1988 is £2,790.32 in 2025, a rise of 179%, or 2.81% a year.
How much prices rose in different years
Annual changes, derived from the rounded indices, vary a lot. They were 1.3% in 2003, 2.7% in 2017 and 0.8% in 2020, then 9.1% in 2022 and 7.2% in 2023, before easing to 2.6% in 2024 and 3.4% in 2025. Our figures are derived by us, so ONS published rates may differ by 0.1.
A short high-inflation spell can dominate a result. Between the 2021 and 2023 annual averages, the index rose from 111.6 to 130.5, so £1,000 became £1,169.35: a 16.9% change, which is 8.14% a year.
| Period | £ amount | Equivalent | Average rate |
|---|---|---|---|
| 1988 to 2025 | £1,000 | £2,790.32 | 2.81% |
| 2000 to 2025 | £1,000 | £1,903.71 | 2.61% |
| 2015 to 2025 | £100 | £138.40 | 3.30% |
| 2021 to 2023 | £1,000 | £1,169.35 | 8.14% |
Limits of a CPI calculation
- It is an average. Your own costs may rise faster or slower than the typical basket, for example rent or energy.
- Annual averages. A single month or a part-year can differ from these figures. The latest ONS bulletin (16 September 2026) put CPI inflation at 3.1% in the 12 months to August 2026. The 2026 annual average is not available until January 2027.
- Not wages or house prices. Those have moved differently from CPI.
- Rounded indices. The ONS indices are rounded to one decimal place.
Savings need to beat inflation to grow in real terms, which is where Percentage change, increases and discounts helps with the percentage maths.
Note: This is general information, not advice. Check the ONS website for the latest published inflation data.
Using inflation in practice
Inflation figures are useful for putting old prices, salaries or savings balances into today’s money. A 1990s salary looks small until you scale it by the index, and a long-term saver can see how much of a nominal gain was only keeping pace with prices. They are also useful when comparing a pension or benefit that rises by a set percentage each year with the price level. Remember to use the same two years for both ends, use annual averages consistently, and treat the answer as an estimate of general price change rather than a promise of what a specific item would have cost. The percentage maths behind this is covered in How to calculate percentages.
Try the calculator
Use the UK inflation calculator calculator for any pair of years from 1988 to 2025, in either direction. To see how savings grow at a given rate, try Compound interest. We will update the data each year.
Open the free UK inflation calculator
Step-by-step: working out the value of money by hand
You do not need a calculator to use the index. Follow these steps with the ONS annual averages quoted in this guide.
- Pick the two years and look up their CPI index values (2015 = 100).
- Divide the later index by the earlier one. This gives the price-level ratio.
- Multiply your amount by that ratio to move money forward in time. To go backwards, multiply by the earlier index and divide by the later one.
- Subtract 1 from the ratio and multiply by 100 for the total percentage change.
- For an average yearly rate, raise the ratio to the power of 1 divided by the number of years, then subtract 1.
Worked example: a £25,000 salary in 2010. The 2010 index is 89.4 and the 2025 index is 138.4. The ratio is 138.4 ÷ 89.4 = 1.548, so prices rose by about 54.8%. Multiply: £25,000 × 1.548 = £38,702.46. The average rate over 15 years is about 2.96% a year. In other words, someone on £25,000 in 2010 would need roughly £38,700 in 2025 simply to keep the same general purchasing power.
Worked example 2: is your pay rise or interest rate beating prices?
A rate only beats inflation if it is higher than the price rise over the same period. Compare real outcomes, not headline ones.
| Question | Calculation | Result |
|---|---|---|
| £1,000 from 2019, in 2025 money | £1,000 × 138.4 ÷ 107.8 | £1,283.86 |
| Price rise 2019 to 2025 | 138.4 ÷ 107.8 − 1 | 28.4% |
| Average yearly rate | ratio to the power of 1/6, minus 1 | 4.25% |
| £50 in 1995, in 2025 money | £50 × 138.4 ÷ 67.2 | £102.98 |
| £1,000 from 2008, in 2025 money | £1,000 × 138.4 ÷ 84.7 | £1,634.00 |
So if your salary was £30,000 in 2019, it needed to reach about £38,516 by 2025 to keep pace with the general price level (£30,000 × 1.2838). A 12% total rise over those years, which would give £33,600, would be a real-terms cut, even though the number on the payslip went up.
The same logic applies to savings. Suppose £10,000 earns 4% a year for 5 years and prices rise 3% a year. The nominal balance becomes £12,166.53. Deflate it by 1.03 to the power of 5 and the real value is about £10,495, a real gain of roughly 1% a year rather than 4%. This is a hand calculation using assumed rates, not a forecast. For the compounding side of it, see Compound interest explained, with examples.
Nominal and real: key terms
- Nominal value: the amount in pounds at the time, with no adjustment.
- Real value: the amount after adjusting for price changes, so that years can be compared fairly.
- Purchasing power: how much a pound buys. When prices double, a pound buys about half as much.
- Base year: the year set to 100 in the index. For the series used here it is 2015.
- CPI and CPIH: two ONS headline measures. CPIH adds owner occupiers’ housing costs and council tax.
- Disinflation: prices still rising, but more slowly than before. Falling prices are deflation, which is different.
A common confusion is between a falling inflation rate and falling prices. If inflation eases from 9.1% to 2.6%, as the annual figures show between 2022 and 2024, prices are still higher than before; they are just rising more slowly.
Common mistakes when adjusting for inflation
- Mixing index years. Use annual averages for both years, or monthly values for both. Do not compare a monthly index with an annual one.
- Applying the wrong direction. Going forward multiplies by later index ÷ earlier index. Reversing the fraction gives a wrong, smaller answer.
- Using a rate instead of an index. Adding up yearly percentages understates the true change because the changes compound. Multiply the ratios or use the indices.
- Treating the result as the price of a specific item. Cars, houses, food and energy have each moved differently from the average.
- Ignoring the latest data. The annual series runs to 2025. For the current year, check the ONS monthly release; the latest bulletin used here (16 September 2026) showed 3.1% in the 12 months to August 2026.
Percentage mistakes underlie many of these, so Percentage change, increases and discounts is a useful companion.
Frequently asked questions
Where does the inflation data come from?
The Office for National Statistics, using the CPI index series D7BT with 2015 equal to 100, annual averages from 1988 to 2025.
Why does the calculator stop at 2025?
2025 is the latest full year of annual averages. The 2026 figure is not available until the year ends, and we will update the data each year.
Is CPI the same as my personal inflation?
No. It tracks an average basket, so your own rate depends on what you buy. CPIH adds housing costs that CPI leaves out.
What is the average annual rate?
It is the compound yearly rate that turns the starting price level into the ending one over the number of years between your two choices.
What is the Bank of England inflation target?
The Bank of England says the government sets it a target of keeping inflation at 2%, measured by CPI.
Why are my results different from the headline rate in the news?
Headline rates compare a month with the same month a year earlier. This calculator compares annual averages for two chosen years, so the numbers can differ.
Can I use this to see how much a house or a car cost in the past?
Not accurately. CPI is a general basket, and house prices and car prices have moved differently. Use it for general purchasing power, not for one item.
Does inflation affect savings and debt differently?
Yes. Rising prices erode the real value of cash savings, but they can also reduce the real burden of a fixed debt. What matters is how the interest rate compares with inflation.