UK Salary Calculator: How Inflation Affected Your Salary in 2022I
Our calculator will show you what CPI inflation means for your finances and how much less your money can buy compared to last year.
Workers in the UK faced a record drop in wages in real terms in the three months to June, with wages falling by 4.1% after adjusting for inflation.
This follows an unprecedented rise in the consumer price index (CPI), a measure of inflation, with the price of goods and services rising by an average of 9.4% in June year on year.
But how much less is your money worth because of inflation?
We’ve created a salary calculator to show you how much the value of your salary has dropped this year in the face of the rising cost of living.
How much has inflation increased?
In the first six months of the year alone – between December 2021 and June 2022 – prices rose by 5.8%, according to CPI data from the ONS.
This means you will now have to shell out an average of £1.06 to buy what would have cost you just £1 at December 2021 prices – although not all goods and services are rising at the same rate and some prices may have lower.
To put it another way, this means that £1 from December 2021 would only stretch to buy you 94p of goods and services at June prices.
How much less is your money worth?
We’ve created a salary calculator below to help you understand what inflation means for your finances.
If you type in what your monthly income was in December 2021, the calculator will show you how far that money would have gone in June, after inflation.
For example, if you earned £1,500 in December, that would only buy you the equivalent of £1,417.49 worth of goods and services in June.
National Insurance contributions also increased in April, which is not reflected in the calculator.
What are we doing against inflation?
Inflation is largely due to rising fuel, energy and food prices.
The ONS said fuel costs jumped 42.3% in the 12 months to June, marking the biggest jump since records began.
Chancellor Nadhim Zahawi and Bank of England Governor Andrew Bailey have both pledged to control inflation.
However, the Bank of England expects inflation to rise even further in the autumn as Ofcom’s upcoming review of the energy price cap is expected to push annual bills up to almost 3 £000.
The current cap of £1,971 is already a record breaking the previous record by 54%. It is expected to climb to £2,980 over the next period, which runs from October to December.