Article last updated 22 July 2025.
Rathbones, one of the UK’s leading providers of investment management services for individuals, charities and professional advisers, has launched a personal inflation calculator, designed to provide clients with a way of calculating how their wealth is effected by inflation.
The calculator launches on the back of the recently issued report on inflation authored by Rathbones’ Head of Asset Allocation Research, Ed Smith, entitled, ‘Under Pressure?’
Clients are asked to enter their personal spending in several categories on a monthly and annual basis, which covers discretionary and non-discretionary expenditure. These include clothing and footwear, recreation and culture, restaurants, cafes and take-aways; and household utilities, rent, and care costs, respectively.
Ed Smith comments: “Inflation is part of our everyday economic reality and a topic that should resonate with all investors, whether they are looking to preserve their wealth or to grow it.
Indeed, many of our clients have inflation-adjusted return targets. Inflation is usually defined as the average rise in prices paid by the ‘average’ consumer. The UK CPI rate of inflation is calculated by how much money was spent on thousands of different goods and services in the previous year. But many of us often ask how applicable the headline rate of inflation experienced by the average consumer is to our personal experience. We’ve calculated rates of inflation based on the expenditures of different age groups and income brackets, gathered by the Office for National Statistics. Our analysis shows a surprising consistency between them.
“Over the past 15 years, the CPI for the highest-earning households has averaged 2.1%, the same as the headline index. Similarly, the difference between the average rate of inflation experienced by different age groups over the past 15 years has been negligible (less than 0.1%), apart from the under 30s, who have faced an extra 0.3% of inflation a year, due to the higher proportion of their spending accounted for by utility bills. Our personal inflation calculator is a tool that looks to demonstrate this consistency in an engaging, interactive manner.”
Smith adds that while CPI has not yet peaked*, investors should not worry, as over the next 20 years, inflation expectations are likely to remain well anchored, with any inflationary or deflationary impact from ageing, technology or other phenomena, offset with monetary policy.
“To this end, a balanced, multi-asset portfolio, with equities at its core may be the key to superior risk-adjusted returns. Bonds are likely to struggle as interest rates rise, pressured by policy normalisation and demographics, so we favour diversifying assets instead. The biggest risk to this benign view is the prospect of technology-induced low inflation that central banks struggle to offset.”
For more information, please contact:
Madhu Kalia
Intermediary PR (UK/Europe)
Rathbone Unit Trust Management
020 7399 0256
07825 596302
madhu.kalia@rathbones.com
Sam Emery/Hugo Mortimer-Harvey
Quill PR
020 7466 5056/5054
sam@quillpr.com
hugo@quillpr.com
Notes to editors:
Please be aware that the calculator provides an indicative inflation rate; actual inflation rates may differ and it may not capture all expenditure or describe it in the same way as the CPI (Consumer Price Index).
*Based on the annualised UK Consumer Price Inflation rate (CPI) in October, 2017, at 3.0008%.
About Rathbones Group Plc: Rathbones Group Plc, through its subsidiaries, is one of the UK’s leading providers of investment management services for individuals, charities and professional advisers. This includes discretionary investment management, unit trusts, tax planning, trust and company management, financial advice and banking services. Rathbones manages £37.5bn of assets (as at 30 September, 2017). This includes £5bn run by Rathbone Unit Trust Management. Rathbones has over 1,100 staff in 16 locations across the UK and Jersey. Rathbone Investment Management Limited is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. Registered office: Port of Liverpool Building, Pier Head, Liverpool L3 1NW. Registered in England No. 1448919. Rathbone Investment Management Limited is part of Rathbones Group Plc. Head office 8 Finsbury Circus London EC2M 7AZ. The information contained in this note is for use by investment advisers and journalists and must not be circulated to private clients or to the general public. Past performance should not be seen as an indication of future performance. The value of investments and the income from them may go down as well as up and you may not get back your original investment. Edward Smith is Head of Asset Allocation Research. The views reflected in the research paper and in the press release are his own and should not be taken as investment advice.
