Salary Inflation
Calculator UK
Find out if your pay rise has kept up with inflation. Enter your salary in a past year and your current salary to see the real-terms change in purchasing power.
Understanding real pay and inflation
Nominal pay is the number on your payslip. Real pay is what that number can actually buy — adjusted for the rising cost of goods and services over time. If your salary has gone up by 10% over five years but prices have risen 20%, your real pay has fallen by roughly 8%, even though your nominal salary is higher.
About the CPI data used
This calculator uses annual average UK Consumer Prices Index (CPI) data published by the Office for National Statistics (ONS). CPI is the main measure of inflation in the UK. The data covers 2010 to 2025. Years from 2026 onward are estimated using a forward CPI assumption of 2.5% per annum.
What happened to real wages 2021 to 2024?
UK inflation surged from under 2% in 2020 to over 11% in late 2022, driven by energy prices and supply chain disruptions following the pandemic and Russia's invasion of Ukraine. Real wages fell sharply as pay rises lagged behind. By mid-2023 nominal wage growth began to outstrip CPI, and real wages gradually recovered. Many workers are still catching up to their 2021 purchasing power levels.
Negotiating a pay rise using inflation data
If your salary has not kept pace with cumulative inflation since your last rise, you can quantify the shortfall clearly. For example, if inflation has been 25% since 2020 and your salary has risen by 15%, you need a further 8.7% pay rise just to restore parity in real terms. Use the calculator result in your pay negotiation discussion.
Related calculators
To see the full picture of your current salary after deductions, use the main salary calculator. Our pay rise calculator compares any proposed pay increase against inflation to show whether you are gaining or losing in real terms. Want to see what your take-home would be at a higher salary? The take home pay calculator handles any annual gross. Our income tax calculator confirms whether a higher salary pushes you into a new tax band. Checking whether your wage has kept pace with the National Living Wage increases? Use our minimum wage calculator. Planning for the long term? Our pension calculator helps you see how contributions build over time alongside real wage growth.
Frequently asked questions
Divide your current salary by your past salary and compare the result to the CPI ratio over the same period. If your salary ratio is higher than the CPI ratio, your real pay has increased. The calculator above does this automatically and shows the exact real-terms gain or loss in pounds.
CPI measures a basket of consumer goods and services but excludes most housing costs. RPI includes mortgage interest payments and council tax, so it is typically higher than CPI. The government uses CPI to uprate benefits and the personal allowance. RPI is still used for some index-linked gilts and rail fares.
UK CPI peaked at 11.1% in October 2022, the highest rate in over 40 years. Annual average CPI was 9.1% in 2022 and 7.3% in 2023. It returned to near the Bank of England's 2% target in mid-2024. The cumulative rise in prices from 2020 to 2025 is approximately 25%.
To maintain your real pay, you need a pay rise at least equal to the CPI inflation rate for the period. With CPI around 2 to 3% in 2025 and 2026, a 3% pay rise roughly preserves your purchasing power. Any rise below current CPI means a real-terms pay cut.