Inflation calculator - British Pound

£10,000 in 1971

£124,710.81 in 2020

The inflation rate in United Kingdom between 1971 and 2020 was 1,147.11%, which translates into a total increase of £114,710.81. This means that 10,000 pounds in 1971 are equivalent to 124,710.81 pounds in 2020. In other words, the purchasing power of £10,000 in 1971 equals £124,710.81 in 2020. The average annual inflation rate between these periods was 5.28%.

Inflation timeline in United Kingdom (1971 - 2020)

The following chart depicts the equivalence of £10,000 throughout the years due to inflation and CPI changes. All values are equivalent in terms of purchasing power, which means that for each year the same goods or services could be bought with the indicated amount of money.

All calculations are performed in the local currency (GBP) and using 6 decimal digits. Results show only up to 2 decimal digits to favour readability.

The following table contains relevant indicators:

Indicator Value
Total Inflation (1971-2020) 1,147.11%
Annual inflation avg. (1971-2020) 5.28%
CPI 1971 8.7
CPI 2020 108.5
£1 in 1971 £12.47 in 2020

How to calculate the time value of money with inflation data?

There are several ways to calculate the time value of money. Depending on the data available, results can be obtained by using the compound interest formula or the Consumer Price Index (CPI) formula.

Using the compound interest formula

Given that money changes with time as a result of an inflation rate that acts as a compound interest, the following formula can be used: FV = PV (1 + i)n, where:

  • FV: Future Value
  • PV: Present Value
  • i: Interest rate (inflation)
  • n: Number of times the interest is compounded (i.e. # of years)

In this case, the future value represents the final amount obtained after applying the inflation rate to our initial value. In other words, the future value is the amount in 2020 that equals £10,000 in 1971 in terms of purchasing power. There are 49 years between 1971 and 2020 and the average inflation rate was 5.2847%. Therefore, we can resolve the formula like this:

FV = PV (1 + i)n = £10000 * (1 + 0.052847)49 = £124,710.808852 ≈ £124,710.81

Using the CPI formula

When the CPI for both start and end years is known, the following formula can be used:

Final value = Initial value *
CPI final/CPI initial

In this case, the CPI in 1971 was 8.7 and in 2020 was 108.5. Therefore,

Final value = Initial value *
CPI final/CPI initial
= £10,000 *
108.5/8.7
= £124,710.81

United Kingdom inflation - Conversion table

Initial Value Equivalent value
£1 pound in 1971 £12.47 pounds in 2020
£5 pounds in 1971 £62.36 pounds in 2020
£10 pounds in 1971 £124.71 pounds in 2020
£50 pounds in 1971 £623.55 pounds in 2020
£100 pounds in 1971 £1,247.11 pounds in 2020
£500 pounds in 1971 £6,235.54 pounds in 2020
£1,000 pounds in 1971 £12,471.08 pounds in 2020
£5,000 pounds in 1971 £62,355.4 pounds in 2020
£10,000 pounds in 1971 £124,710.81 pounds in 2020
£50,000 pounds in 1971 £623,554.04 pounds in 2020
£100,000 pounds in 1971 £1,247,108.09 pounds in 2020
£500,000 pounds in 1971 £6,235,540.44 pounds in 2020
£1,000,000 pounds in 1971 £12,471,080.89 pounds in 2020

Value of Pound over time (by year)

Period Value
1971 10,000
1972 10,903.45
1973 11,737.93
1974 12,979.3
1975 15,463.05
1976 19,312.28
1977 22,222.34
1978 24,920.77
1979 27,010.73
1980 31,666.83
1981 36,455.22
1982 40,846.78
1983 43,055.79
1984 45,344.16
1985 47,420.89
1986 50,097.73
1987 51,976.4
1988 53,907.25
1989 56,665.83
1990 59,999.12
1991 65,516.28
1992 69,769.09
1993 71,952.96
1994 73,562.14
1995 75,286.25
1996 77,585.07
1997 79,768.94
1998 81,263.17
1999 82,757.4
2000 84,021.75
2001 85,056.22
2002 86,205.63
2003 87,699.86
2004 88,849.27
2005 90,343.5
2006 92,297.49
2007 94,941.13
2008 97,125.01
2009 100,113.47
2010 102,182.4
2011 105,400.75
2012 109,193.8
2013 111,837.44
2014 114,021.31
2015 114,825.9
2016 115,400.6
2017 117,469.54
2018 120,687.88
2019 123,101.64
2020 124,710.81