Five Ways to Compute the Relative Value of a UK Pound Amount, 1270 to Present


Enter initial year before entering the initial amount and enter amount as a number without a £ sign or commas.





1270 to 19701971 to present
Initial Year:
Initial Year:
Initial Amount:
pounds
shillings
pence
Initial Amount:
£
Desired Year:

See the results in a table format.

Why not the current year?

 

Often one knows the price, cost, or value of something in a particular ("original") year, and one wants to know the value of this money amount in another ("desired") year. There are many contexts in which such a computation might be performed. Examples include: the determination of the appropriate level of deferred compensation in a legal case, updating the price of a commodity fifty years earlier, and assessment of government expenditure on health care in one year relative to another. There is no single "correct" measure, and economic historians use one or more different indices depending on the context of the question.

This comparator performs such computations for amounts in U.K. currency. The technique is as follows: (1) select a general measure of price, income, or output, and (2) multiply the money amount by the desired-year/original-year ratio of the measure. The resulting, "updated", monetary amount may be termed the "relative value" of the original amount.

The measure often used is the price of a "bundle" of goods and services that a representative group of consumers buys or earns. In the U.K. that measure is usually taken to be the "retail price index" (RPI), which corresponds to what is called the "consumer price index" in other countries.

However, there are problems with the RPI as a measure. One problem is that the bundle changes over time. For example, carriages are replaced with automobiles, and new goods and services are created (such as personal computers, cellular phones, and heart transplants). Another problem is that the RPI is oriented solely to what is purchased by households and omits business investments or government expenditures. Perhaps most important, the context of the monetary amount may lead to a measure preferable to the RPI. It is a fair statement that the RPI is used far too often without consideration of its consequences.This website presents four additional indices besides the RPI. It also suggests that using each of these indices can be defined in more than one way, depending on the type of thing you are comparing.

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).

The Five Indices Used

Price Index
GDP Deflator
Average Earnings
GDP Per Capita
GDP

Defining the Measures

The measures of relative value presented here are computed using the ratio of the change in the indices listed above. Your initial amount is multiplied by the observed value of each index from the desired year divided by the observed value from the initial year.

The best measure of the relative value over time depends on the type of thing you wish to compare.
If you are looking at a Commodity, then the best measures are:

Real Price
Labour Value
Income Value
Economic Share

If you are looking at an Income or Wealth, then the best measures are:

Real Wage or Real Wealth
Relative Labour Earnings
Relative Income
Relative Output

If you are looking at a Project, then the best measures are:

Real Cost
Labour Cost
Economy Cost

Here Are Some Examples

Cost of the Big Ben Bell in Elizabeth Tower
Borrowing to Purchase Shares of Suez Canal Company
Cost of World War I
Earnings of Barristers and Physicians
Stipend of Archbishop of Canterbury
Price of Tea
Price of Daily Mail

*In these examples, we use the convention that a billion is 1,000 million.

References for Examples

Citation

"Five Ways to Compute the Relative Value of a U.K. Pound Amount, 1270 to present," MeasuringWorth, 2025.

URL: www.measuringworth.com/ukcompare/


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