Cost of living: US versus UK
Comparing cost of living expenses between the States and the UK isn’t apples to apples. It’s not even apples to watermelon. When I try and figure out what our budget might be, my head starts to explode.
I’ve got our US living expenses figured out, but the UK is a mystery right now. Here’s what I’m thinking so far - we’ll see how right or wrong I end up being!
Property: This is one of those things that obviously depends on location, but for us it’s way more expensive to buy a house in the UK. We currently live in the relatively cheap Midwest, so there’s some serious sticker-shock of what you get for your money in the UK. (Despite my best efforts, I think we’re like those dummies on House Hunters International who need a giant fridge and an oven in, like, Thailand.)
Food: I think technically it’s more expensive in the UK, but I also think the quality is better. A good loaf of bread for me here is like $7 or $8 (I know, I know). And eating out seems cheaper in the UK. Maybe it’s the tipping culture that, ahem, tips the scales?
Consumer goods: We’ve got piles of cheap clothes and stacks of discount electronics here in the US. We’ll definitely stock up on laptops and iPhones before we move. You can always bag a deal anywhere, but in general, I think the prices tend to be lower in the US.
Transportation: Cars and gas seem more expensive in the UK, but distances are shorter too. (I mean, we wouldn’t even blink at a quick four-hour car ride in the US whereas that could get you across the country in the UK.) Trains can be expensive in the UK, but at least it’s an option. And the flights can be really affordable in the UK compared to the US. Unless you’re some kind of flight booking wizard, domestic flights in the US are sooo expensive. I’m looking forward to cheaper European flights that mean we can have nice vacations.
Salaries: I find US salaries to be much higher than UK ones. Although British friends will swear up and down there are good-paying jobs in the UK, all the job postings we see are not great. Senior managers in London making £30K or £40K, that kind of thing. Although there are other differences to take into account, like not having to pay for health insurance and having more generous leave policies. It still worries us that our current household income levels just won’t be possible in the UK. We’ll see - there are so many other reasons to move and money isn’t everything . . . but it sure helps.
Taxes: Income tax is cheaper in the US, but property tax will be a lot better for us in the UK. In the UK, you pay stamp duty when you buy a house (a big upfront percentage based on the property sale price) and you pay a relatively affordable monthly council tax. Here in the US, we pay over $7K per year in property taxes and it goes up every year based on the value of our home. It really feels untenable, and I would imagine it’s really stressful for retired people. How do you budget for an ever-increasing annual tax bill of thousands of dollars? By the time we would pay off our mortgage in 25 years, we’d still be on the hook for a couple thousand dollars every month in perpetuity. The UK has their annoying TV licensing fee, but I guess I can live with that. (I once got into a heated debate with a British person who felt very patriotic about the licensing fee, I mean, c’mon.)
Utilities: We heard from a lot of UK relatives last winter about the insane cost of home heating, so I’m a little wary of what utilities will cost us. However, phone plans and internet are ridiculously cheap in the UK versus the US. Here, we’ve gone as cheap as we can and we still pay over $150 per month for phones and internet. I’m hoping we’ll reduce that by over half in the UK.
Healthcare: That’s a big one, of course. I know the NHS isn’t perfect, but the thought of not having to navigate health insurance anymore feels like a weight being lifted that I didn’t even know I was carrying. After paying for intense IVF treatments (more about that later) I’m ready to say goodbye to the insurance battles and surprise bills and thousands upon thousands forked over the healthcare providers. We’ve easily paid over $5K per year for the past five years toward premiums, deductibles and non-covered treatment.
Entertainment: What’s that? Ha. We’re at the stage of life where evenings are less about concerts and nights out and more about TV reruns and catching up on work and house stuff. As for kids, museums and festivals and that kind of thing, I think there’s some parity. Most of the kid activities we do now are free or low cost, and I’m hopeful we can swing the same in the UK. I’m not sure what stuff like swimming lessons will cost us, but I can only worry about so much, right?
Childcare and education: It’s expensive in both places but more subsidized in the UK. We’ve easily spent over $20K per year on childcare for our oldest in her first four years. She’ll start preschool in the fall through the school district, but we’ll still be paying around $500 per month for additional coverage. (Right now we juggle working and taking care of our baby so have saved $25K on infant care.) The UK has started to roll out free childcare for younger kids, and by the time we move, I’m hoping our youngest can start preschool at age 3 and it’ll be covered (or at least more affordable) so we can both work without it gouging our income so significantly.
That’s what I’m thinking so far at least. Did I miss any big factors?