Why Not the Latest Observations?
We use annual data for our computations, therefore, it is necessary to have an annual observation for both the initial year and the desired year. For the indices based on GDP, it is only after the year is over that GDP can be measured. For price indices, the annual observations are usually the average of monthly observations. It would not be valid to compare a monthly observation in the current year with an annual observation in an earlier year.
A Purchasing Power Calculator compares the relative value of a past amount of pounds to a present amount. A simple calculator uses only the prices of consumer purchases to do this whereas a complete purchasing power calculator, such as found in this website, uses various prices, wages, output, etc. depending on the context. For more information on this issue, consult Five Ways to Compute the Relative Value of a UK Pound Amount, 1830 to Present where you will also find further discussion of this issue.
The answers you get from this calculator will be the same as those from the Relative Value calculator. That is, you will get the "simple" purchasing power calculator result
and other choices that may be better depending on the context.
To determine the value of an amount of money in a particular ("original") year compared to another ("desired") year, enter the values in the appropriate places below. For example, you may want to know: How much money would you need in the year 2000 . to have the same "purchasing power" as £1 5s 3d in year 1900 . If you entered these values in the correct places, you will find that the "simple purchase power" answer are £81.19 .
Note that prior to February 15, 1971 ("Decimal day," or "D-day"), monetary amounts in the U.K. were expressed as pounds (£), shillings (s.) and pence (d.), where £1 = 20s. = 240d. After 1970, there were 100 pennies in a pound, so one (new) penny = 2.4 old pence. All numbers should be entered in decimal rather than fractional form (for example, 1.5 rather than 1 1/2).
Lawrence H. Officer and Samuel H. Williamson, "Purchasing Power of British Pounds from 1270 to Present," MeasuringWorth.
Please let us know if and how this discussion has assisted you in using our calculators.