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Savings and Investment Calculators

Inflation Calculator

See how much purchasing power your money loses to inflation: enter an amount, an average annual inflation rate and a term, and get the real value and the equivalent future cost.

Use an average annual rate. The ECB inflation target is around 2%; check your national statistics office's CPI for recent figures (INE in Portugal and Spain, ISTAT in Italy, INSEE in France).

Real value (purchasing power)
€820.35
Purchasing power lost
€179.65
Equivalent future cost€1,218.99
Cumulative inflation21.9%

Educational estimate, not financial advice. Future inflation is uncertain and may vary.

Video: how to use the calculator

1

What inflation does to your money

Inflation does not reduce the figure in your account: it reduces what that figure buys. At 2% average annual inflation, €1,000 kept for ten years is still €1,000, but it buys what about €820 buys today. The loss compounds in exactly the way interest does, only against you.

2

Two ways to read the result

The calculator gives the same reality twice. The real value tells you what today’s money will be worth in future purchasing power. The equivalent future cost tells you what something costing that amount today will cost after those years. The first reading is for savings; the second is for planning a specific purchase.

3

Which rate to enter

Use an annual average, not a single month’s figure. The European Central Bank’s inflation target is around 2% over the medium term, and Spain’s CPI is published monthly by the INE. Over long horizons it is worth testing several scenarios rather than trusting one assumption.

4

Why it matters next to your return

A 3% return against 2% inflation leaves roughly 1% in real terms. A deposit that looks safe can still lose purchasing power if its rate sits below inflation. This is the comparison that decides whether your savings genuinely grow or only appear to.

Worked example

Example: €20,000 at 2.5% average annual inflation over 15 years keeps purchasing power equivalent to roughly €13,800 today, a loss of about 31%. Seen the other way: something costing €20,000 today will cost around €28,900 in fifteen years.

Frequently asked questions

What average inflation rate should I use?
For long-term projections many use around 2% a year, the European Central Bank’s medium-term target. For the recent figure, check the CPI published by the INE. It is worth also testing a higher scenario: future inflation is uncertain.
Does inflation affect everyone the same way?
No. The CPI is an average across a basket of goods and services, and your personal inflation depends on what you spend on. Someone spending a large share of their budget on housing or energy can experience inflation quite different from the published average.
How do I protect savings from inflation?
The general principle is to seek a return above inflation, which normally means accepting some risk; money sitting in an unremunerated account loses purchasing power with certainty. Which product suits you depends on your horizon, your risk tolerance and your circumstances, and this is not a recommendation.
What is a real return?
It is the return after inflation is deducted: roughly the interest rate minus inflation. It is the only one that tells you whether your money buys more than it did.

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Author: Thorben Rasmus Idel · Reviewed by: Nahar Geva · Last reviewed: