The previous calculators are based on actual money, but the value of your income (the buying power if you like) is affected by the rate of inflation. The actual income received in money terms is exactly the same as with the UFPLS income calculator and uses the same underlying spreadsheet, but this calculator includes an additional field to allow you to model the impact of inflation on your income. The results show the impact of inflation on how much sooner it would take for you to run out of money, if you looked at your pot in terms of purchasing power or real money terms – scary!
You can insert your own value of inflation, but as a guide:
- The UK Government’s long term inflation target is 2%
- The UK’s historic average inflation rate between 1982 and 2011 was 3.87%.
If you want to scare yourself even further , take a look at the ThisisMoney.co.uk Historic Inflation Calculator to see how the value of money has changed since 1900.