Inflation Calculator
This inflation calculator can help you see how much buying power your savings will lose over time. Enter your total savings, how long you’ll hold them for as well as an inflation rate(s) and see how much your money will be worth in real terms in the future.
See How Inflation Affects Your Savings – Adjust the values to estimate your future purchasing power
You'll lose €3,045 in buying power over 15 years
By Year 15, your savings of €10,000 will only buy you the equivalent of €6,955 worth of products today. That's a loss of purchasing power of -30.45%. You'll need €14,377 in the future just to be able to buy as much as you can today. To achieve that, your money will need to earn an after-tax return of 43.77% between now and then.
- Buying Power After 15 Years
- €6,955
- % Loss in Buying Power
- −30.45%
- Equivalent Amount Needed
- €14,377
- After-Tax Return Required
- 43.77%
A savings account won’t protect you from inflation. Long-term investing in low-cost exchange-traded index funds is the single best way to grow your wealth. Don’t know where to start?
How This Calculator Works
Your Inputs
| Input | What it means |
|---|---|
| Total Savings (€) | How much money you have in the bank today. |
| Held For (Years) | How many years your savings will sit in the bank. |
| Inflation Rate | The annual rate by which the price of goods and services are expected to rise, expressed as a percentage. You can set a custom inflation rate or use one of our pre-populated options if you’re not sure. Multiple inflation rates can be added and compared simultaneously on the chart view. The table view shows your results broken down year-by-year. |
Understanding Your Results
| Result | What it means |
|---|---|
| Buying Power After X Years | The amount of goods and services you’ll be able to buy in the future, in today’s money. |
| % Loss in Buying Power | How much value your money has lost to inflation, expressed as a percentage. |
| Equivalent Amount Needed | The amount you’ll need in the future just to be able to buy as much as you can today. |
| After-Tax Return Required | The minimum rate of return your money needs to earn, after-tax, to not lose value to inflation. |
What is Inflation and Why Does it Matter?
Inflation is the increase in the price of goods and services over time. Prices rising over time are actually expected and a normal part of how economies work. This is why a loaf of bread costs more today than it did ten years ago.
Essentially, if prices rise, but the amount in your bank account remains the same, you won’t be able to buy as much as you could before.
How is inflation measured? The rate in Ireland is calculated by the Central Statistics Office (CSO). Each month the CSO collects around 53,000 prices and compares them to prices from the previous month, to measure how quickly the cost of living is changing.
What is the Consumer Price Index?
The Consumer Price Index (CPI) is the official measure for inflation in Ireland. It measures how the prices of everyday goods and services change over time.
The CPI tracks a broad basket of goods and services that represents what an average household in Ireland typically spends money on. That basket covers physical goods like food and fuel as well as services like insurance, taxi fares and hairdressing.
Each item in the basket is given a weight based on how much households typically spend on it. An item that takes up a larger share of household spending has a greater impact on the overall index.
A 2% rise in electricity prices would affect the CPI more than a 20% rise in the price of coffee, because households spend far more on electricity than on coffee. These weights are taken from the CSO’s Household Budget Survey, which is carried out every five years.
For example, restaurants and accommodation services have the largest weight in the basket at 19.96%. Housing, water and energy comes second at 15.37%. Education services have one of the smallest weights at 1.69%. The basket is made up of 45% goods and 55% services. The full divisional breakdown is published monthly by the CSO.
The CSO tracks tens of thousands of prices each month, so rather than using euro amounts, they use index numbers, which make it easier to compare price changes across very different products.
Every index starts from a base reference period, against which all future prices are measured. The CSO sets this at 100. Every month is given a number relative to that base. A reading of 105 means prices are 5% higher than in the base period.
Take a hypothetical example. Let’s say January 2026 is our base reference period, set at 100. In July 2026, the index for bread read 102.5. Bread prices have increased by 2.5% since the start of the year. By January 2027, the bread index reads 106. Bread prices are now 6% above where they started.
To calculate the percentage change between any two periods:
% Change = ((Index in Later Period − Index in Earlier Period) ÷ Index in Earlier Period) × 100
The index in the later period is the more recent reading. The index in the earlier period is the starting point. The result is multiplied by 100 to express it as a percentage.
Applying that to our example above:
((106 − 100) ÷ 100) × 100 = 6%
This tells us that bread prices rose 6% between January 2026 and January 2027.
Key Insight: Index numbers track the rate at which a price changes, not the price itself. A coffee and a car could both have an index of 106, but this says nothing about which costs more. A cheap item can rise in price faster than an expensive one.
The All-Items CPI measures the combined price change across a fixed basket of goods and services, expressed as one single index number.
A common use is to check whether wages have kept pace with prices. If the All-Items CPI rose by 5% over a year, but your wages only rose by 3%, your pay increased in nominal terms but fell in real terms.
If the index reads 100 in one period and 103.6 a year later, the annual inflation rate for that period is 3.6%. You could enter that figure as a custom rate in the calculator to simulate results at that level of inflation.
The CSO publishes two measures of inflation: the CPI and the Harmonised Index of Consumer Prices, also known as the HICP. Both are built from the same monthly price data but cover a different set of items.
The CPI includes mortgage interest and Local Property Tax (LPT). The HICP leaves both of those out, along with building materials, motor tax, union subscriptions and part of house and motor insurance.
The reason for this is that the HICP is designed to be compared across EU countries. Housing costs and tax systems differ significantly from one country to the next, so those items are excluded to keep the measure consistent.
If you’re comparing Ireland’s inflation rate to the eurozone average or the ECB’s 2% target, the HICP is the right figure to use. For understanding the cost pressures on Irish households specifically, the CPI is more relevant.
Your Personal Inflation Rate
Your personal inflation rate is the rate at which the cost of living is changing for you as an individual. The rate of inflation that you actually experience depends on your spending habits. If your spending is more heavily weighted towards certain categories versus the national average then, when prices are increasing, you’ll feel the effects of inflation more intensely than the CPI would suggest.
Equally, if you don’t spend money on items that are experiencing price increases, you’ll be in a better position than the ‘average’ Irish household.
For example, ‘Clothing and Footwear’ carries a weight of 4.918% in the national basket and rose 7.4% in the year to May 2026. If you spend a larger share of your income on clothes than the average Irish household, that 7.4% rise affects your budget more than the headline CPI figure would indicate.
Inflation Formula
Future Buying Power = Current Amount ÷ (1 + Rate)^Years
Where:
- Future Buying Power = what your money will actually be able to buy at the end of the period
- Current Amount = the amount of money you have today
- Rate = the annual inflation rate, as a decimal (3% → 0.03)
- Years = how long your money is held for
Example Inflation Calculation
Say you have €10,000 sitting in an Irish current account. If we expect inflation to run at 3% per annum for 15 years, then our future purchasing power can be calculated as:
Future Buying Power = 10,000 ÷ (1.03)^15
Future Buying Power = 10,000 ÷ 1.558 = €6,415
In 15 years, your €10,000 will only buy you the equivalent of €6,415 today. The balance in your bank account hasn’t changed, but what that balance can buy you most certainly has.
Types of Inflation
While prices generally go up over time, the speed and underlying reasons behind these shifts can vary. Understanding why this happens means looking at the main forces that drive inflation.
Demand-pull inflation occurs when the overall demand for goods and services in the economy is larger than the available supply. Here, there is too much money chasing too few goods. When consumers want to buy more than what factories and shops can supply, sellers naturally increase their prices. This drives up the cost of living.
Cost-push inflation arises when the price of goods and services increase due to rising production costs. For example, a higher raw materials cost. Companies may pass these costs on to consumers to maintain their profit margins, increasing the cost of living.
Built-in inflation occurs when consumers expect the current rate of inflation to continue or worsen into the future. Workers start demanding higher wages to keep pace with the rising cost of living. Employers oblige and pass the higher costs onto customers which, in turn, fuels inflation even further. This creates a feedback loop known as the wage-price spiral.
Key Insight: Inflation expectations are a self-fulfilling prophecy. If customers grow to expect prices to rise in the future, they may frontload their purchases today. With enough customers buying goods today in anticipation of prices rising tomorrow, prices will almost certainly rise tomorrow. This is why policymakers strive for price stability in the economy.
Deflation is the opposite to inflation, a sustained decrease in the prices of goods and services across the economy. This means your money gains purchasing power over time. For example, a television today will cost less in the future.
Cheaper prices might sound like a win for consumers, but deflation is considered highly damaging to an economy. People don’t spend as much, they wait for lower prices and take money out of the economy. Less money in the economy hurts businesses, forcing them to cut costs further which can lead to frozen wages or layoffs.
Debt also becomes more burdensome. The amount you owe remains the same but earning the cash needed to pay it back becomes more difficult in a shrinking economy.
Disinflation is a temporary slowing down of inflation. Prices are still rising, but at a slower rate than before. For example, if an economy’s inflation rate drops from 3% to 2%, that would be disinflation. Things are still getting more expensive, just not as quickly.
Hyperinflation is inflation that has spiralled out of control, typically defined as a period where prices skyrocket by more than 50% per month.
The negative impacts beyond price increases are savings being rapidly eroded and consumers being forced to spend money quickly to avoid it losing value. Economies stop functioning as businesses are unable to set stable prices or pay workers predictably.
The classic historical example of hyperinflation is Weimar Germany in 1923. Massive amounts of German marks were printed to repay its debts, causing prices to double every 3.7 days.
Stagflation is a nasty economic cocktail that’s defined by low economic growth, high inflation and widespread unemployment. The primary cause of it is a supply shock in a core material used to run the economy such as oil. A sharp rise in the price of oil means the cost of producing products and offering services rises. These costs make it hard for businesses to pay wages, forcing layoffs.
Stagflation is particularly sticky because the central bank is trapped. If they raise interest rates to fight inflation, there will be more unemployment. If they lower rates to create more jobs, inflation will accelerate.
An example of this is the 1970s oil crisis where OPEC cut off their oil supplies during political conflicts, causing energy prices to spike globally.
Keynesianism vs. Monetarism
Keynesianism and Monetarism are the two main schools of thought on how to respond to inflation.
Keynesianism is the belief that governments should step in and manage the economy by controlling how much they spend. When times are bad, spend more. When inflation is running high, spend less.
Monetarism is the belief that inflation is caused by too much money in circulation. Central banks control this by adjusting interest rates.
European Central Bank (ECB) & Inflation
The European Central Bank, known as the ECB, is responsible for managing inflation across all countries that use the euro. Ireland is one of those countries. The ECB aims to keep inflation at 2% a year and has two tools to do that:
Eurozone Interest Rates: The ECB sets the interest rate at which money can be borrowed across the eurozone. This is the cost of borrowing money. A higher rate makes borrowing more expensive for businesses and households. Spending falls and prices rise more slowly. A lower rate reduces the cost of borrowing and spending increases.
Quantitative Easing (QE): Quantitative Easing is where the ECB creates new money and purchases financial assets like government bonds. The institutions selling those assets end up with more money to lend. More lending means more spending in the economy and prices rise. The ECB used QE after the 2008 financial crisis and again during COVID-19.
How to Beat Inflation
Beating inflation means your money grows faster than prices rise. If inflation runs at 3% and your savings also grow at 3%, your account balance is up but you haven’t actually gained anything. The price of goods and services has risen at the same rate as your money.
To come out ahead, your after-tax return needs to beat the inflation rate, not just match it. The ‘After-Tax Return Required’ figure in our calculator shows you the rate to beat. If you earn below this, your money is losing value in real terms, even if the figure in your account is increasing.
Long-term investing in a diversified ETF is one way to achieve the returns you need. A diversified equity ETF has historically returned more than inflation over periods of ten years or more. The trade-off is that the value of your investment will fluctuate in the short term, which wouldn’t happen with cash sitting in a savings account.
What This Calculator Does Not Include
Variable Inflation Rate: The calculator uses the rate(s) you enter and applies it every year. In reality, inflation goes up and down. Therefore, over longer periods, the result becomes less accurate.
Additional Savings or Withdrawals: The calculator works off a single lump sum held for the full period. If you plan to add money along the way or take some out, that won’t show up in the results.
Personal Inflation: The CPI measures how much prices rise across a wide range of everyday goods. If most of what you spend money on is rising faster than that average, your personal inflation rate will be higher than the figure you’ve entered.
Frequently Asked Questions
Ireland’s inflation rate has averaged around 3% in recent years according to the CSO. This rate moves from month to month depending on energy and housing costs in particular. The CSO publishes updated figures monthly on their website.
Purchasing power is what your money can actually buy. When inflation rises, that buying power falls, the same money buys you less things than it could before.
Calculators like this one use a fixed rate to project future prices. Real inflation moves around year to year. Treat the result as a working estimate, not a fixed outcome.
Core inflation tracks goods and services excluding food and energy. Economists use it because food and energy prices fluctuate wildly in the short term. By stripping them out, core inflation reveals the underlying, long-term price trend in the economy.
Suppressed Inflation, also known as Repressed Inflation, occurs when a government artificially freezes or controls prices in an economy with high inflationary pressure. Inflation remains low on paper, but the price ceiling can lead to chronic shortages. Suppressed inflation often leads to a rise in black markets where goods and services are traded at their true value.
Shrinkflation is a sneaky and less visible form of inflation where a product’s size, weight or quantity shrinks while its price remains the same. Companies understand consumers are highly sensitive to price increases, making small decreases in product size a less noticeable option. Shrinkflation allows companies to protect their profit margins without driving consumers away.
Inflation benefits people who have borrowed money at a fixed interest rate. Their monthly repayments stay the same while wages tend to rise over time, making those repayments easier to meet. The money they pay back is also worth less than the money they originally borrowed. People on variable rate loans do not get the same benefit as their repayments rise alongside inflation.
