How much does 3% inflation erode purchasing power over 20 years?

At 3% annual inflation, $100 today buys only $55 worth of goods in 20 years — a 45% reduction in purchasing power. Over 30 years it falls to $41.

How do I protect savings against inflation?

Invest in assets that historically outpace inflation: equities (7–10% average annual return), real estate, inflation-linked bonds (TIPS/gilts), and commodities like gold.

Inflation Impact on Purchasing Power Calculator

Calculate how inflation erodes purchasing power over time. See what today's £1,000 will be worth in 10, 20, or 30 years, and how much you need to save to maintain real value.

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Enter the values for the scenario you are assessing. Calculate how inflation erodes purchasing power over time. See what today's £1,000 will be worth in 10, 20, or 30 years, and how much you need to save to maintain real value. Use the inflation purchasing power result to inform your calculation.

Inflation Impact on Purchasing Power Calculator

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Frequently Asked Questions

How much does 3% inflation erode purchasing power over 20 years?

How do I protect savings against inflation?