THE PERSONAL INFLATION CALCULATOR
Inflation is big news in 2022. Predictions are that it could rise to 11% or more by the end of the year.
But what exactly is inflation? And how does it affect you?
The main impact of inflation is that unless your income increases at the same rate as inflation, you will not be able to buy the same amount of products and services as you were previously able to do.
The specific impact of inflation will vary between individuals. To help you work out exactly what the impact will be on you, the ONS have created a personal inflation calculator.
The calculator will only take a few minutes to complete, and any information you provide to the calculator is not stored.
You will be asked to enter basic details of:
- Your current housing situation (mortgage, rent, or neither)
- Your household income (you can choose average UK income if you prefer)
- Your spending in the following categories:
- Food and drink
- Clothes and footwear
- Higher energy prices : Demand for gas increased as economies opened up after Covid, and gas supplies are now under pressure due to the Russian invasion of Ukraine.
- Higher food prices : The war in Ukraine has also caused supply shortages and increased prices of many food items including basic items such as margarine, pasta and tinned tomatoes.
- Business costs : Rising prices are affecting business customers as well as domestic customers. Many businesses are also finding it difficult to fill job vacancies and are having to offer higher wages to attract job applicants, which also increases their costs.
- Fair Finance Advice Tool – this helps you to find the best place to get the financial advice or support you need.
- Fair Finance Benefits Calculator – this provides a free and impartial assessment of any benefits and grants to which you may be entitled.
The calculator will then show you your personal inflation rate, and how it compares with the current national rate of inflation.
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 of National Statistics (ONS). Each month, they collect around 180,000 prices of over 700 products and services regularly purchased by consumers. These prices are then compared with prices at the same time the previous year.
Why is inflation so high in 2022?
Inflation is increasing in most countries around the world, as well as within the UK. Since the Covid-19 pandemic, there have been several factors that have caused this to happen.
Three of the main factors currently pushing up inflation are:
How to cope with rising inflation
As prices rise, you may find that your income doesn’t stretch to cover all your monthly expenses. This is another way that the personal inflation calculator can help. You will be able to see a breakdown of your regular spending and understand more about where your money is going. This can be really useful to help you create a monthly budget to help make ends meet. You can find out more about how to do this in our article How to make a budget and stick to it.
Making a budget, and doing what you can to adjust your spending, may be enough to get through this period of high inflation. The Bank of England expects inflation to begin to fall in 2023, and to return to its target of 2% in around two years.
However, if you are in a position where you need more help or advice, Fair Finance has other ways to help. We are a registered charity and provide debt advice and financial capability services, to help people regain control of their money.
On our Money and Debt Advice page you will find two useful tools:
At Fair Finance, we are here to help through this period of high inflation. So if you need help or advice, start by getting in touch with us and we will see what we can do.