Personal Inflation Calculator
What is inflation?
Inflation is a measure of how much the prices of goods and services have increased over a fixed period of time, usually a year. The average increase in prices is known as the inflation rate.
The inflation rate is calculated by the Office for National Statistics (ONS). Each month, they collect around 180,000 prices of over 700 products and services regularly purchased by consumers. These prices are used to construct a weighted price index, (such as the Consumer Price Index – CPI), which is then compared to its level at the same time the previous year.
How does it affect me?
Inflation affects everyone differently. While national inflation figures provide an average picture of rising prices, your own experience depends on how you spend your money.
For example, if a large proportion of your budget goes towards housing, energy, food, childcare or transport, changes in the cost of these essentials may have a bigger impact on you than on other households.
To help you understand how inflation is affecting you personally, the Office for National Statistics (ONS) has created a personal inflation calculator. The personal inflation calculator will show you your personal inflation rate, and how it compares with the current national rate.
The calculator only takes a few minutes to complete, and no information provided is stored.
You will be asked to enter basic details about:
- Your current housing situation (mortgage, rent, or neither)
- Your household income (you can choose average UK income if you prefer)
- Your spending across a range of categories, including:
- Housing
- Energy
- Food and drink
- Childcare
- Clothes and footwear
- Travel and transport
- Entertainment and leisure
The calculator will then estimate your personal inflation rate and show how it compares with the current national UK inflation rate.
What is my personal inflation rate?
Your personal inflation rate is based on your spending habits.
While national inflation measures the average change in prices across the economy, no two households spend their money in exactly the same way. So if your spending is concentrated in categories where prices are rising faster than average, your personal inflation rate may be higher than the national figure. Equally, it could be lower if more of your spending falls into categories experiencing slower price increases.
The calculator uses information about your household spending to create a personalised estimate of how rising prices are affecting your budget.
How to cope with rising inflation
When prices increase faster than your income, everyday expenses can become harder to manage. Understanding your personal inflation rate can help you identify where your money is going and which areas of your budget are under the most pressure.
Using the calculator can help you:
- Understand which spending categories contribute most to your cost of living increases
- Spot opportunities to reduce or manage household spending
- Build a more realistic monthly budget
- Plan ahead for future increases in essential costs
Creating and reviewing a budget regularly can make it easier to stay in control of your finances. Even small changes to spending habits can make a meaningful difference over time.
You can find out more in our guide: How Do I Create a Budget? A Simple Guide to Taking Control of Your Money.
Need extra support?
If you’re finding it difficult to keep up with rising household costs, help is available.
Fair Finance provides debt advice, financial capability support and affordable financial services to help people take control of their money.
You can also access:
- Fair Finance Advice Tool – A free tool to help you find the most appropriate financial advice, support or guidance based on your circumstances.
- Fair Finance Benefits Calculator – A free and impartial benefits checker that can help identify benefits, grants and other financial support you may be entitled to receive.
If you’re worried about your finances, getting advice early can help you explore your options and prevent problems from becoming more difficult to manage.
At Fair Finance, we’re here to help. Get in touch to find out what support may be available to you.
