Cost of living in the UK

Cost of living in the UK

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If you're considering moving to the United Kingdom, it is advised to research London house prices, the cost of living in Edinburgh and other cities, along with childcare costs, British food prices, energy prices, and more before you land on British soil.

The cost of living in the UK is high compared to other countries, although in many cases, higher salaries can offer a comfortable lifestyle for some expats. This guide gives you an in-depth overview as to general living costs in the UK including housing, healthcare, public transport, groceries, childcare, taxes and entertainment. 

The majority of expats arriving in the UK, come in search of jobs and an opportunity to expand their education. In general, expats with a good level of education can enjoy a higher quality of life despite relatively high costs for housing, public transport and utility bills.

Since the turn of the Millennium, Britain has attracted workers from the EU, immigrants and expats looking for a better quality of life. The decision to leave the EU in 2016 may have an impact on the number of foreigners allowed to live and work in the country. Immigration levels are likely to be tightened.

Until legislation for Brexit is organised, the UK remains an attractive destination for expats looking to further their career, education and cultural experiences. The opportunities are still abundant.

Cost of living in UK

Whilst London is arguably the destination of choice for expats arriving in the UK, the living costs in the capital are significantly higher than other parts of the country. The cost of living in the south is typically higher than the north, but the salaries also reflect that. London house prices remain high meaning a move to the big smoke often requires a bigger budget.

Having said that, the UK perform surprisingly poorly in the Mercer’s 2016 quality of living survey. Only two cities make the top 50 best cities in the world; London is ranked 39th and Edinburgh 46th. Yet other than London, some of the UK’s other large cities are relatively affordable.

Cost of living in London 

  • 16 percent less expensive than Zurich
  • 11 percent less expensive than New York
  • 40 percent more expensive than Munich
  • 73 percent more expensive than Madrid
  • 53 percent more expensive than Brussels
  • 19 percent more expensive than Paris
  • 13 percent less expensive than Tokyo
  • 64 percent more expensive than Rio de Janeiro
  • 13 percent more expensive than Los Angeles 


Cost of living in Manchester 

  • 27 percent less expensive than London
  • 35 percent less expensive than New York
  • 13 percent less expensive than Paris
  • 26 percent more expensive than Madrid
  • 12 percent more expensive than Brussels
  • 27 percent less expensive than Hong Kong
  • 17 percent less expensive than Tokyo
  • 20 percent more expensive than Rio de Janeiro
  • 17 percent less expensive than Los Angeles

Cost of living in Manchester

Cost of living in Birmingham 

  • 14 percent less expensive than London Hong Kong
  • 23 percent less expensive than New York
  • 20 percent more expensive than Munich
  • 48 percent more expensive than Madrid
  • 31 percent more expensive than Brussels
  • 46 percent more expensive than Shanghai
  • 41 percent more expensive than Rio de Janeiro
  • about the same as Los Angeles 

Oxford living costs

  • 23 percent less expensive than London and Hong Kong
  • 31 percent less expensive than New York
  • 8 percent more expensive than Munich
  • 33 percent more expensive than Madrid
  • 18 percent more expensive than Brussels
  • 31 percent more expensive than Shanghai
  • 13 percent less expensive than Tokyo
  • 27 percent more expensive than Rio de Janeiro
  • 12 percent less expensive than Los Angeles 

Cost of living in Edinburgh 

  • 29 percent less expensive than London
  • 37 percent less expensive than New York
  • about the same as Munich
  • 23 percent more expensive than Madrid
  • 8 percent more expensive than Brussels
  • 20 percent less expensive than Tokyo
  • 20 percent more expensive than Rio de Janeiro
  • 20 percent less expensive than Los Angeles
 
London house prices

House prices UK

The UK housing market is notoriously unstable and always in a state of flux. Housing costs UK are never stagnant. Now the economy is strengthening UK house prices and rent fees are on the rise. There is also a housing shortage in the UK which ultimately impacts on house prices and rent fees.

Needless to say London is the most expensive place to live in the UK. The average London house prices in the most reputable areas of Chelsea, Kensington and west London have topped the £1m mark. House prices in central London are even higher at £1.6m.

In other areas of London, the average price for flats was £508, 195 whilst terraced properties were going for £633.248. Neither flats or terraces provide much space for families of four. East London is slightly less expensive where average house prices are around £450,000.

If you plan to rent in London, a one-bedroomed flat will cost between £600 and £900 a month. Singles willing to live in shared accommodation can dramatically reduce rental charges. Expect to pay between £300 and £600 for a single room. Utility bills are typically an additional expense.

Elsewhere in England, house prices are around £300,000-£500,000 in the south, and £200,000-£400,000 in the midlands and further north. Smaller accommodation is available for around £100,000-£200,000.

According to Numbeo’s 2017 figures, the average cost of renting in a city centre in the UK is £500 and £1500 for a one-bedroomed apartment. For three bedrooms in the city centre the cost rises to £750-£2500 whilst outside the city is considerably cheaper at £600-£1800.

Utility costs and energy prices in UK 

The privatization of energy companies on the UK means utility costs keep getting higher year-on-year despite the government’s efforts to introduce policies that will reduce energy bills. As a result, energy bills in the UK cost more than other European countries. 

According to figures produced OVO Energy in 2014, the average utility bill for a small flat in the UK is £784 a year, a medium-sized property will cost around £1,153 and a large house £1604. By 2016, those figures had risen by £300-£400 per household.

Energy companies do offer electric and gas dual fuel options which reduce utility bills a little. The government are also making it compulsory for households to switch to Smart Meters which will theoretically reduce utility bills by 2% a year – about £26, although there are upfront costs to install the meters.

In terms of home entertainment, broadband, telephone and satellite TV costs can be bundled into one expensive if you buy Sky or BT. However, packages vary depending on the channel selection you want. Sky sports and cinema packages are more expensive. You can also purchase broadband and landlines with mobile deals or some supermarkets and department stores such as Tesco and John Lewis. Expect to pay somewhere in the region of £30 to £60 for the full quota.

Energy prices UK

Cost of public transport in UK 

Public transport in the UK is also more expensive than other countries. Buses are particularly expensive and not always reliable. Surprisingly, London boasts the best transport system in the UK, mainly thanks to the Underground – although it is the most expensive transport network in the world.

Residents in London should invest in an Oyster card which provides access to buses and metro for slightly cheaper rates. A single fair with an Oyster Card is £1.50 on the bus and £2.40 on the underground.

Elsewhere in the UK, the only public transport is buses and taxis. Buses cost a minimum of £1.20. The cost varies depending on the city and the distance you are travelling.

Taxis are also costly. Black cabs are readily available, but the starting fare is around £3 and £2 per mile. In London, the tariff is £5. Private companies and firms like Uber are less expensive than black cabs. Before travelling by taxi in the UK, estimate the cab fare with an online price finder.

Owning a car is also expensive in the UK thanks to relatively high fuel costs. The price per liter is between £117-£137.90 for unleaded and £118.40-£139.90 for diesel.

The UK also has an extensive rail network. Train fares can be extortionate although monthly passes are much more cost effective. If you are making one-off journeys and know the dates you are travelling booking 2 or 3 weeks in advance using thetrainline can save you an average of 43% per journey.

Cost of British food

The UK has a string of supermarket chains which can be affordable if you shop in the right places. Lidl and Aldi stock a variety of quality products at reasonably low prices for budget shoppers whilst at the other end of the scale, Waitrose and Sainsbury cater towards the higher end of the market. There are also middle of the range supermarkets such as Tesco, Asda and Morrisons which often have good deals although the weakened pound following Brexit has reported added £21.31 on to the average weekly grocery bill.

The average weekly shopping bill is estimated to be around £60 in the UK for two people, although expats can expect to reduce grocery shopping to around £45-£50 in the budget stores. To get the latest average prices for staple products check out this website

British food

School fees UK

Expats residing in the UK are eligible to send your children to state schools is England free of charge. The only costs are for uniforms, dinners and extra-curricular books that are not offered by the UK education system.

Children are obligated to attend school from the age 5 to the age of 16, but can extend your education at high school or college to take A’ levels which are required to qualify for University places.

The UK has one of the best private school systems in the world, but tuition fees range between £5000 and £8000 a year. The upside is the quality of education is significantly higher than state schools.

Non-English speaking expats often choose to send their children to an international school to learn the education syllabus from your home country. Although international schools represents the least disruption to your child’s education, they are also the most expensive.

Most international schools charge an application fee of £250 which is non-refundable if your child fails to secure a placement. Tuition fees range between £3000-£9000 around the country and up to £24,000 in London.

University fees are capped at £9000 per annum by the UK government. The average University course costs £6000 a year, but fees include other services such as private tutoring, access to information technology and various library services. A small fee is payable for photocopies.

If you intend to take a postgraduate course in the UK, expect to pay between £12,000 and upwards of £20,000 per annum depending on the University you choose and the subject you want to take.

Healthcare costs in UK 

Residents in the UK have access to free medical care under the National Health Service (NHS). This covers doctor’s appointments and some hospital treatments although most prescriptions carry a charge. In order to qualify for NHS treatments, expats are obliged to register for an NHS number.

There are also plenty of private clinics. Prices vary widely depending on the type of treatment you require and the experience of the specialist. However, operations are long-term illnesses can be very costly and could easily run up into tens of thousands.

Harley Street in London is regarded as the home of some of the world’s leading specialists, but charge around £210 for a consultation. Treatments are significantly higher. Harley Street is only really a viable option for the mega-rich.

Healthcare insurance is not an obligation in the UK and most expats or native take out healthcare insurance because of the wide range of free treatments available on the NHS. If you do not qualify for NHS treatments insurance companies such as AXA, Bupa and Allianz provide healthcare insurance for expats.  Average private healthcare insurance premiums in the UK are £1,120 a year.

Childcare costs in UK

Working parents with children under the age of five need to make childcare arrangements. There are several options. According to The Money Advice Service, leaving children in the care of a registered childminder will cost an average of £109-£115. In London the average is around £150.

Children under the age of two years old are eligible to attend a day nursery. The average fee is the same as a childminder. Alternatively, you could hire a part-time nanny, but the fee doubles. The budget option is to hire an au pair and pay between £70-£85 plus board and lodging. 

British food and the cost of dining out in the UK 

The major cities in the UK are cosmopolitan and have a wide choice of restaurants, café and pubs (bars) that serve food. The latter typically offer the best value for money deals and chain pubs such as Brewers Fayre, Harvester, Punch Taverns and Scream pubs make an effort to serve a good selection of dishes at a reasonable price.

If you want to go to a nice restaurant, you will find reasonably priced options for around £20-£25 a head with a glass of wine or pint of beer. For something a little more upmarket expect to pay closer to £40-£50. If you live in London add £10-£15 on to the budget mentioned above, although there are plenty of cheaper options as well that offer reasonable quality.

Snacks, sandwiches and fast-food cost around £2.50-£5. Some shops like Boots and Marks & Spencer offer meal deals which include a sandwich and a snack starting at £.3.29

The price of a bottle of wine in restaurants will typically start at a budget price of £10 to £20, but can be up to and over £100 in some restaurants. The average price for a beer is £3.50-£5 in the south and around £2.80-£4 in the north. Prices in bars are more expensive the traditional pubs.

Living in Oxford

Tax costs in UK 

If you have been living and working in the UK for more than 183 days, you are eligible to pay personal income tax. Compared to some other western European countries the tax thresholds in the UK are not bad although the higher cost of living accounts for the higher tax brackets.

If you earn less than £11,500, you are not obligated to pay tax. However, if you are self-employed you are still obligated to submit a nil-return tac form. Most expats will pay personal income tax directly from your monthly salary. The tax bands are as follows:

  • Up to £11,500 – 0%
  • £11,501-45,000 – 20%
  • £45,001-150,000 – 40%
  • Over 150,000 – 45%

 

For more information about your potential tax liabilities in the UK, see our comprehensive guide here

Social security and pension costs in UK 

The social security system in the UK is complex to work out how much individuals pay each month. If you start a job without being registered with social security you have to pay emergency tax for the first month which typically involves substantially overpaying taxes. However, the difference is returned after the second or third month.

Social security benefits (National Insurance) cover expats for unemployment, sickness, maternity, disability and death. The rate you have to pay depends on the length of service and the amount of income. Most expats earning between £680-£3,750 a month will pay 12% to social security. If you earn over £3750, you are only obligated to pay 2% but can volunteer more or pay into a private pension. Expats from other European Economic Area countries can also draw benefits earned in your native country upon retirement. 

For more detailed information about the social security system in the UK, check out our comprehensive guide here.

 

For more information on economic indicators such as consume inflation and tax news visit the UK’s Office for National Statistics website.

 

Expatica

 
 


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1 Comment To This Article

  • moveup posted:

    on 13th April 2018, 19:50:51 - Reply

    Cost of living in UK is too expensive.