New research shows
As the paper £5 is withdrawn from circulation, Lloyds Private Banking looks at how the value of money has changed since the modern blue £5 note was first introduced in 1957.
The value of money has fallen by 96 per cent over the last 60 years, according to new research from Lloyds Private Banking.
The research shows that a twenty-three fold increase in retail prices means that someone today would need £113 to have the equivalent purchasing power of £5 in 1957.
The purchasing power of money has eroded at an average rate of 5.3% a year over the past 60 years. By decade, retail prices grew the most rapidly between 1967 and 1977 at an annual average rate of 11.3%. The lowest increase in inflation came over the most recent period 2007 to 2017 with an annual increase of 2.7 per cent. At the same time, the average weekly wage has increased 4,142%, from £12 in 1957 to £509 today.
Table 1: Today’s equivalent to £5 in the past
|£5 in||Equivalent spending power in 2017|
Source: Lloyds Bank calculations based on ONS figures, March 2017