Retail Price Index

kopicbloodaxe

Hi,

Looking for info on how to calculate the RPI over time. What I want to do is work out the effects of inflation on my salary between 2001 (last pay rise) and 2007 (next pay rise!).

I just got 3% pay rise after 6 years without one and trying to figure out how worse off I am now compared to 2001.

Hope this makes sense!

Thanks.

Sooler

RPI data is here ...

http://www.statistics.gov.uk/cci/nugget.asp?ID=22

How do I revalue a sum of money?
For example, how do you work out how much maintenance payments or rent has gone up between two dates if these are to be adjusted using the RPI?

Data from table 5.1 or 5.3 of 'Focus On Consumer Price Indices' should be used with this formula:

Sum of money (£) x (Later date RPI/ Earlier date RPI)

Focus on Consumer Price Indices
http://www.statistics.gov.uk/StatBase/Product.asp?vlnk=867

Focus on Consumer Price Indices August 2006 (1.2Mb - Pdf)
http://www.statistics.gov.uk/downloads/theme_economy/FocusonCPI_Aug_2006.pdf

kopicbloodaxe

Brilliant, thanks!

Using the figures and formula for my purposes...

Jan 2001 RPI = 675.0
Jan 2007 RPI = 795.3

Purchasing power 2007 =
£100 * (675.0 / 795.3) = £84.87 = a 15.13% drop

So, to answer my initial question, my salary in 2007 has around 15% less purchasing power than in 2001.

To wrap this up, with my pay rise of 3%, would I just take that off the percentage drop? i.e. 15% (drop) - 3% (rise) = 12% overall drop?

Thanks, again!