What is inflation?
Inflation is the rate at which prices for everyday goods and services rise over a period time. When this happens your money becomes less valuable and has less purchasing power.
Higher demand for goods and services, an increase in production costs, or having more money in circulation are common causes of inflation. When inflation is high, central banks will try and control it to help keep the economy stable.
How can inflation impact my savings?
As inflation rises, your money becomes less valuable. This also applies to savings and investments, like your pension. The impact of inflation over time means that the same amount of money will buy you less in the future.
Our calculator can help you understand the impact of inflation on your investment and compare it to the growth of the investment, using different growth rates that you can choose.
The inflation calculator is for educational purposes only and should not be used as an actual representation of what your savings or investments could be worth. Please speak with a financial adviser if you need more advice.
Key inflation calculator assumptions:
- Any regular contributions don't change and last for the whole timeframe.
- No withdrawals are made over that time.
- Growth rates for this calculator are examples only - the actual rate will depend on how your investments perform.
- We've added an Aviva Charge to your investments which is never more than 0.4% a year.
- Actual product charges for your investments may be higher or lower than the example amount above and will depend on your provider.
Inflation calculator
Have you ever thought about the effects inflation can have on your money?
Use our inflation calculator to understand more about the purchasing power of your savings, when a rate of inflation is applied over a period of time.
Inflation is the loss of purchasing power your money has due to goods and services becoming more expensive over time. Every month, the Office of National Statistics (ONS) compares the prices of over 700 items, including everyday goods like a loaf of bread or a pint of milk. The month-on-month difference in value is then used to help calculate the current rate of inflation.
Our calculator will help to provide you with an idea of the impact inflation can have on your savings and investments.
Plan for your future today
Planning for your retirement early will not only give you peace of mind, but it can also allow you to grow your savings and investments over the longer term.
The longer your money is invested, the more it may be able to grow. It’s this potential investment growth that can help offset the effects of inflation.
Remember, the value of an investment can go down as well as up, and you could get back less than you put in. Your tax benefits will depend on your circumstances and may change in the future.
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