Inflation allowance

A separate allowance for inflation will be calculated and added to the award by the Trust. The value of the inflation allowance is based on the value of the total costs eligible for the allowance and the duration of the grant.

For grants costed in hard currency (e.g. Sterling, Euros and $USA)
Compound inflation will be calculated at 1.6 per cent per annum, applied from Year 2 onwards, as follows:

* Figures calculated using compound inflation of 1.6 per cent per annum, applied from Year 2 onwards, for expenditure not yet incurred.

This applies to all awards made from 1 April 2013 onwards.

For grants costed in all other currencies
The inflation allowance is specific for each country and is calculated by the Trust.

Incorporating inflation into grant costs
When applying for a grant, applicants must provide figures based on current known costs, i.e. exclusive of inflation. However, figures for Year 1 may include known pay awards that will take place during the first year (or an assumed percentage, equivalent to the Trust’s current inflation rate of 1.6 per cent where the scheduled pay award has not yet been confirmed prior to submission of the application). Inflation for Year 2 onwards will be added to the award by the Trust.

With the exception of salary costs of fellows and clinical PhD students, the inflation allowance is not provided for ring-fenced costs (i.e. non-clinical/basic science student stipends; studentship course fees; health insurance costs; and overseas allowances). Please note that the Trust is willing to meet additional salary costs of Trust fellows where their actual employment costs exceed the budget provided.

Note: for non-clinical/basic science PhD studentships, the Trust's studentship stipend scales incorporate an annual uplift for inflation.

The inflation allowance is a transferable fund.

Grants awarded between 1 April 2012 and 31 March 2013

Compound inflation was calculated at 1.3 per cent per annum, applied from Year 2 onwards, for expenditure not yet incurred.

Grants awarded between 1 March 2011 and 31 March 2012

Compound inflation was calculated at 1.7 per cent per annum, applied from Year 2 onwards, for expenditure not yet incurred.

Grants awarded between 1 May 2009 and 28 February 2011

Compound inflation was calculated at 1 per cent per annum, applied from Year 2 onwards, for expenditure not yet incurred.

Grants awarded between 1 October 2007 and 30 April 2009

For grants awarded between 1 October 2007 and 30 April 2009, a consolidated inflationary allowance and the flexible funding allowance (FFA) was provided, based on the value of the award and the duration of the grant. Compound inflation was calculated at 3 per cent per annum, applied from Year 2 onwards, for expenditure not yet incurred. The FFA was normally set at a fixed 2.5 per cent of the total award.

Grants awarded between 1 April 2006 and 30 September 2007

For grants awarded between 1 April 2006 and 30 September 2007, host organisations were required to factor in inflation for future years when requesting salary and non-salary costs.

Grants awarded before 1 April 2006

For grants awarded before 1 April 2006, host organisations were required to factor compound inflation into the costing of each post requested, based on the most recent pay award agreed by the organisation. The Trust factored compound inflation into the costings for UK Trust fellows and students when determining their salary/stipend entitlements.