UK inflation calculator, 2026/27
A salary or dividend figure that looks generous today buys less in ten years' time if it never rises. Enter an amount, an assumed inflation rate and a number of years to see its future cost equivalent and its real value if income stays flat.
The uk inflation calculator runs on the rates and thresholds HMRC has published for the 2026/27 tax year, so the figures you see reflect the position your company is actually filing on rather than a historic set of bands. Change any input and the result recalculates immediately, with no sign-up and nothing sent anywhere.
If you are a director of a UK limited company, use it as a first look before a decision rather than as the decision itself. Uses a constant assumed annual inflation rate you enter; actual CPI or RPI inflation varies year to year and cannot be predicted precisely. Real company positions bring in other income, reliefs, group structures and prior year adjustments that a single page of inputs cannot see, which is why the workings are written out below under personal finance & planning. Read those, then check the numbers against your own accounts, and speak to us if anything looks materially different from what you expected.
Last reviewed 12 September 2026 for the 2026/27 tax year. Reviewed by Waqas Sagar, Member of ICAEW, Fellow of ACCA, Fellow of AAT.
Regulated by
Regulated & AML supervisor
AAT fellow member
Xero Gold PartnerCertified advisor
QuickBooks PartnerCertified ProAdvisor100+ yearsCombined team experienceFully insuredUp to £2m indemnityUK inflation calculator
Result, 2026/27
Equivalent cost in 10 years
Real value today of that same amount if it doesn't rise
Cumulative inflation over the period
Loss of purchasing power if income stays flat
Illustration only, figures are based on the rates you have selected and the information entered. Please check your own position with us before acting.
Estimates for the 2026/27 tax year using published GOV.UK rates. Switch between 2026/27 and 2025/26 above.
How this is calculated
The future cost is calculated by compounding today's amount at the inflation rate you enter for the number of years specified, using the standard compound growth formula. The real value calculation runs the same formula in reverse, showing what a fixed future amount is worth in today's terms if prices rise but the amount itself does not.
Cumulative inflation over the period is simply the compounded rate expressed as a total percentage increase, which is usually a much bigger number than the annual rate might suggest over a longer period, because it compounds.
Why this matters for director pay and pensions
A director who fixes their salary or dividend drawings at a flat amount for several years is effectively taking a real pay cut each year that inflation runs above 0%, even though the number on paper stays the same, which this calculator makes explicit.
The same logic applies to a pension pot or a fixed pension income in retirement; the state pension itself is usually uprated each year, but many private pension annuities and drawdown plans are not, which is worth factoring into long-term retirement planning.
Using this alongside other planning
This calculator is best used alongside a pension or savings projection, since a growth rate that only just outpaces inflation delivers little or no real increase in purchasing power, even though the pot itself is getting bigger in cash terms.
It is also useful when negotiating fixed-term contracts or long leases, where a flat headline figure may be worth considerably less in real terms by the end of the term than at the start.
What this means for your company
Treat the result as a planning figure for the 2026/27 tax year. If it changes what you were about to do, take a director's salary, a dividend, a large asset purchase or a filing decision, check it against your own accounts first. We can review the position with you and confirm the tax treatment before you commit.
Frequently asked questions
What inflation rate should I use?
There is no single correct figure; many people use a long-run average of around 2% to 3%, matching the Bank of England's inflation target, though actual inflation has been both higher and lower than this in recent years.
Does this use the actual CPI or RPI rate?
No, you enter your own assumed rate. For the current published CPI or RPI figures, check the latest release from the Office for National Statistics, since these are updated monthly and are not fixed statutory rates.
Why does the effect of inflation seem to accelerate over time?
Because inflation compounds. A 2.5% rise each year does not simply add up to 25% over ten years; it compounds to a larger figure because each year's rise is calculated on an already-inflated base.
How does this relate to my pay rise negotiations?
If your pay rises by less than inflation each year, your real, inflation-adjusted income falls even though the cash amount increases. This calculator helps quantify that gap over a chosen period.
Keep going
Related calculators
Same rates, different question.
Cost of living calculator
Add up your essential monthly outgoings against your net income to see your monthly surplus or shortfall before deciding on drawings or investments.
Calculator50/30/20 budget calculator
Split your take-home pay into needs, wants and savings using the 50/30/20 rule, useful for directors planning drawings alongside personal outgoings.
CalculatorSalary comparison calculator
Compare take-home pay, tax and National Insurance between two salary levels for 2026/27, useful when weighing a job offer or a director's pay rise.
CalculatorPension pot projection calculator
Project how your pension pot could grow to retirement with regular contributions and compound investment growth, then see the tax relief boost you receive.