Cash inflation calculator
Enter an amount of cash, an inflation rate and a number of years to see what that cash would buy at the end, in today's pounds. At 3% inflation a year, £10,000 kept for 10 years buys what about £7,441 buys today. Add the interest the cash earns, after tax, to see whether it keeps pace.
After 10 years, in today's pounds
£7,441
−£2,559 of buying power (−25.6%)
- Buying power left
- Taken by inflation
- Today's £100 of shopping, in 10 years
- £134
- Cash earning nothing buys half as much after
- about 23 years
The Bank of England's target is 2% a year, measured by the Consumer Prices Index. Actual inflation has run well above and below it, so try a few rates.
Leave at 0 for cash that earns nothing, such as most current accounts. For savings, use the rate you keep after any tax on the interest.
An illustration of the arithmetic at one steady rate, not a forecast, and not advice. Reviewed September 2026.
Worked example
Keep £10,000 as cash that earns nothing for 10 years while prices rise 3% a year, and at the end it buys what £7,441 buys today. Prices will have risen by 34%, so today's £100 of shopping would cost £134. At that rate, cash buys half as much after about 23 years.
How it works
- Inflation is the rise in prices over time. If prices rise 3% a year, something that costs £100 today costs £103 next year and about £134 after ten years.
- Cash that earns nothing keeps its number but buys less each year. Its buying power in today's pounds is the amount divided by how far prices have risen.
- If the cash earns interest, the question is whether that interest, after tax, is higher than inflation. If it is lower, the cash still loses buying power, only more slowly.
- This uses one steady rate every year. Real inflation moves around, so read the result as an illustration of the arithmetic, not a forecast.
Cash as a bond with a negative real yield
A bond pays interest for the use of your money, and its real yield is that interest after inflation. Cash works the same way: its real yield is the interest it earns after tax, less inflation (strictly, the ratio of the two). When that is below zero, holding the cash is like holding a bond that pays back less, in what it buys, than was put in. The calculator shows how that compounds over time.
Frequently asked questions
What inflation rate should I use?
The Bank of England's target is 2% a year, measured by the Consumer Prices Index (CPI). Actual inflation has been well above and below that target, so it helps to try a few rates. Your own inflation can also differ from the official figure, depending on what you spend your money on.
Why does cash lose value when the number in my account does not fall?
The number stays the same but prices rise, so each pound buys less. The loss is in what the money can buy, not in the balance, which is why it is easy to miss.
Does interest stop the loss?
Only if the interest you keep after tax is at least as high as inflation. The calculator shows the interest rate after inflation, known as the real rate. When it is below zero, the cash loses buying power even while the balance grows.
Is this financial advice?
No. It illustrates arithmetic from figures you choose and does not recommend anything. Cash has real uses, such as an emergency fund or money you will need within a few years, and whether any other option suits you depends on your own circumstances.
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This calculator illustrates arithmetic from the figures you enter. It is not advice or a recommendation, and it does not forecast inflation. CoreFi is a trading name of JG Core Ltd (company 16218779). Figures reviewed September 2026.