Timeline allows users to illustrate retirement outcome using extensive historical data or Monte Carlo simulation.
Within the historical model, Timeline uses actual historical CPI that corresponds with the the return in each scenario.
The effect is that Timeline tests multiple inflation rates. It runs scenarios where inflation is 5.3%, then 8%, then 3% and nearly 1000 other alternatives based on what's historically plausible.
- For the UK, the average for all of the periods is 3.8% but as you can see in this link below, the range is from 23% pa to - 26%pa.
The table below shows the range annual historical CPI for other countries.