Real Wage vs Inflation Calculator
See how much buying power your salary has gained or lost since any year. Enter your past and current salary alongside UK CPI inflation data to find your real wage change.
Last updated: April 2026
What is a real wage?
A nominal wage is the number on your payslip. A real wage is what that number can actually buy - your purchasing power. If your salary rose by 5% but prices rose by 8% over the same period, your nominal wage went up but your real wage fell. You are earning more pounds, but each pound buys less, leaving you worse off in terms of what you can afford.
This distinction became acutely relevant for UK workers between 2021 and 2023, when CPI inflation peaked at over 11% while many workers received pay rises of 3–5%. The result was the largest fall in real wages since the 1970s. Even workers who received headline pay rises above inflation often found that frozen tax thresholds (fiscal drag) eroded their real take-home pay further.
How cumulative inflation is calculated
This calculator uses ONS CPI (Consumer Prices Index) annual averages for each year from 2000 onwards. Cumulative inflation between two years is calculated by chaining the annual rates together rather than simply adding them. For example, 10% inflation over two years does not mean 5% per year - it means prices rose by 10% in total, which compounds as each year's higher price level becomes the starting point for the next year's increase.
CPI versus RPI versus CPIH
The ONS publishes several inflation measures. CPI (Consumer Prices Index) is the primary headline measure and the one used for the Bank of England's 2% inflation target. RPI (Retail Prices Index) is an older measure that historically ran about 1 percentage point higher than CPI, partly because it includes mortgage interest payments. CPIH extends CPI to include owner-occupiers' housing costs. This calculator uses CPI as the standard reference, but if your pay was historically linked to RPI (common in some public sector contracts), your inflation experience may differ from our figures.
Why your personal inflation may differ
The CPI basket represents an average UK household. If your spending pattern differs from the average - for example if you rent rather than own, spend a high proportion of income on food and energy, or travel frequently by car - your personal inflation rate will be different from the headline figure. During the 2022–23 energy and food price crisis, lower-income households experienced higher effective inflation than the CPI headline because they spend proportionally more on these essentials.