Inflation

[zingo1327]

Hi guys. I don't know if I'm overthinking this problem or not.I'm trying to work out how much a sixpenny piece in 1965 would be worth nowadays.Depending on which website I use, £1 in 1965 would be worth around £20 today. What's confusing me is that in 1965 there were 240 pennies in the pound and today there are 100. I'd appreciate it if you could show me the formula and answer.

[Buenchico]

There are many different ways of calculating the 'relative worth' today of an historical amount.

For example you could simply apply the rate of inflation for each year and work out a cumulative total. (However, since there are different ways of measuring inflation anyway, there can be more than one possible answer achieved by such a method).

Or you can look at what fraction of an average worker's pay 6d would have formed in 1965 and then calculate the same fraction of an average worker's pay today.

Alternatively you can look at what 6d might have bought you back in 1965 and look at the price of a similar commodity today.

Those, and other methodologies, can produce VERY different results!

This website though examines all the main ways of calculating the answer to your question and, depending upon the method used, finds answers varying between 45p and £1.51:
https://www.measuringworth.com/calculators/ukcompare/

[Peter Pedant]

I am surprised Chris doesnt recollect that a 6d
is now 2 1/2 -
and so if you take a pound then is £20 - then it is 50p

we used to get a penny a day for sweets
6d a week - - bought quite a lot of sweeties

( I LOST £5 in 1973 and thought god what am I gonna eat for the next WEEK ?)

[Jackdaw33]

1s ( 2 x 6d) would buy you 5 cigarettes in 1965, with a couple of coppers change if you settled for Woodbines. Not a fair comparison, though, as duty on tobacco has risen way beyond inflation. How do I remember this? That would be telling.

[ToraToraTora]

taking your figures, a tanner in new pence is 2.5p so 20 x 2.5 = 50p or ten shillings.

[Peter Pedant]

there is some literature on value over the ages (50 or 100)
someone uses mars bars - which used to cost 6d ( I think )

I use £1 in 1914 bought what £10 bought at decimalisation 1971 and £100 in 2000 - now around £120

(Value of £1 from 1914 to 2020 : In other words, £1 in 1914 is equivalent in purchasing power to about £116.15 in 2020, a difference of £115.15 over 106 years. The 1914 inflation rate was 0.00%.)

[Peter Pedant]

incredibly I must have been thinking about this:
https://www.ft.com/content/34859346-b023-11e7-8076-0a4bdda92ca2

[Hymie]

What i find interesting about Peter Pedant’s post is that at £1 in 1914 worth around £120 today – with the smallest coin denomination being a farthing (¼ d), this would be over 10p in today’s money.

[Atheist]

Perhaps it could be approached by considering sixpence invested in 1965 and working out what it would be worth if compound interest had applied.

[jno]

PP, the Financial Times once proposed Mars bars as a yardstick; but I believe they've physically shrunk since then, so that wouldn't work now?

[woofgang]

the problem with the "what 6d" would buy is that some stuff has changed massively in value...like a car for instance.