An inflation calculator shows the purchasing power of money across time using the Consumer Price Index (CPI). If inflation averages 3% per year, £100 in 2000 would need to be £181 in 2025 to buy the same goods. Inflation erodes the real value of money held in savings.
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Pro Tip
The "Rule of 70": divide 70 by the annual inflation rate to estimate years to halve purchasing power. At 3.5% inflation, purchasing power halves in 20 years.
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