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Inflation
Inflation is the rate at which prices rise and fall over time. It can affect things like your savings, investments and other parts of your financial plan.
What is inflation?
Inflation shows how quickly prices go up over time. You can determine it by comparing costs from one year to another.
For example, if milk cost £1 last year and £1.03 this year, inflation is 3%.
Why does it matter?
When prices rise, your money does not go as far. That’s why keeping an eye on inflation can help you make smarter choices about spending.
Inflation rates change each year, so some periods feel more expensive than others.
How does inflation affect savings?
Inflation means prices go up over time. When this happens, your money doesn’t go as far, it buys less than it used to.
For example, if inflation is 3%, the value of your savings could shrink as everyday items become more expensive.
You can check the latest inflation rates on the Office for National Statistics website. Just remember, inflation can rise or fall each year.
How does inflation affect investments?
Inflation calculator
Find out how inflation will affect your savings with our inflation calculator.
- Simply enter an amount of savings you have.
- Add the current inflation rate. The Office for National Statistics has the latest figures.
- We can then tell you the future buying power of your money.
Your result is based on the rate remaining the same for the next year.
This calculator gives an estimate only. It does not include interest you could earn over time.
Remember, the rate of inflation can rise and fall.
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