Tech/Design Salaries US vs UK & How Far the GBP Goes

Hi All,

DH and I are thinking about coming back to the UK (been in the US 12 years). He and I are in senior lead / supervisory and management roles in web and software design.

I've been looking at the job boards to see where roles like ours are clustered and what the salaries are like. I also took a look at some recent pay surveys from our industry. Honestly, I am shocked by how little our colleagues in the UK are getting paid! We're talking less than half of what equivalent roles in the US are earning!

Can those of you in tech and/or design (especially in Scotland) give me some indication of what incomes are really like in the UK? I've been seeing senior / management tech roles posted with basic incomes of 40k-60k GBP, some even lower and rarely any higher.

The discrepancy is so bad that we've thought about retaining US jobs while we're in the UK. We work remotely anyway. I'm sure the tax implications are steep, but I just can't imagine doing the same work I'm doing now and literally taking a 50% or worse pay cut (AND having to commute, lose home office deduction!)

Does the GBP go twice as far as the USD these days? Like if a gallon of milk cost $5.00 here, does it cost 2.50 GBP in the UK? I can tell you right now that our $390k house in New England, USA is about equivalent to a 390k GBP home in the areas around Inverness, not a 195K GBP house.

Whats the deal? Am I missing something?

Sarah

Sorry I can't help you with the work stuff except to say that in general terms, (not talking about for your profession because I don't know) 40k-60k GBP is a really great salary. 

You can buy 4 pints of milk here (half a gallon I think) for 1.00gbp

https://groceries.asda.com/

Some things are cheaper here too. Car insurance for example and of course having the NHS makes a big difference.

I also think £40 to £60k is an excellent salary. I think the average GP  earns £45k, my BIL is an experienced solicitor in his 50's earning £60k.

We are finding most common day to day stuff much cheaper in the UK. The sort of quality bread we pay $4 for here costs 70p in Aldi. As mentioned above milk is much cheaper. Mobile phone plans, cable TV and high speed internet is much cheaper here.

Car insurance and house insurance is also much cheaper here. This 3 years I've paid ~$10k/year in health care, insurance and out of pocket co pays, prescriptions and deductibles. NHS is free at point of service, including prescriptions for those of us over 60.

However we did enjoy the much larger salaries in our fields of engineering in the USA and stashed away a very sizeable pot of retirement funds, well over what is allowed in the UK. (UK has a lifetime maximum of £1m in tax deferred accounts which includes the cash equivalent of any pensions).

Also worth checking how much UK tax you'd pay on £60k salary compared to say $120k salary in US.

The average salary in the UK is around £26,000, with the average household income around £31,000. About 90% of the UK population earns less than £40,000 per year.

In general, groceries are much cheaper in the UK, as well as things like phone/TV/broadband packages and cellphone plans... oh, and you can get second-hand cars much cheaper in the UK than in the US as well, but most other things are more expensive.

Generally, you should expect to pay the same amount or more in GBP as you would pay in USD (i.e. a $10 DVD in the US will cost around £10 in the UK).

In terms of house prices, in the US, my aunt has a large, 5-bedroom, 3.5-bath house with a pool, which is about 2,000 sq. ft. and is worth about $140,000. Last year, I bought a tiny (less than 1,000 sq. ft.) semi-detached, 3-bedroom, 1.5-bath house in one of the cheapest areas of England for just over £150,000. The same house back in my home town in south-west England would cost about £250,000.

Also, whether you decided to keep the US jobs and continued to work remotely or found positions at the lower UK salary, you would be able to afford a first rate dual US/UK accountant to ease you over any potential tax hurdles. 

Whats the deal? Am I missing something?

No, the UK markedly undervalues labor with incredibly high costs of living. If my husband wasn't English with family there, I don't think I would be moving as we're both in the technology industry. I've had numerous friends turn down visa offers because the "competitive pay" was a complete joke. I really wonder what corporate profits are like there, because the government would get a whole lot more tax $$ if people were paid what they are in other areas of the developed world.

Starting salaries are lower. Average salaries are lower. Not sure about top management jobs (I suspect working in 'the City' pays similarly to financial sector jobs in the US). Living standards are 'lower' and houses are tiny. You adjust and downsize. Stuff is just stuff.

I am a teacher with 5 years experience. I've checked and my salary is less than the starting salary of teachers in Mississippi (one of the worst performing states on standardised scores), when I converted it last summer (before the pound tanked). And yet our education outranks the US on international (PISA) tests.

Milk is stupid-cheap here because apparently we want to put our dairy farmers out of business. If you think tech salaries are low, farmers struggle to make any profit at all.

When we moved to the UK I kept my US tech job. If I lost it then I would expect to have to move to Silicon Valley to get another good-paying job.

glassdoor.co.uk gives pretty good salary indications.  But yeah, they are WAY less here.  And housing is WAY more.

A lot of people say food is cheaper here - I'm not so sure.  But we are an allergy family and so we have to shop at the big name stores and those products are expensive.  My husband must eat gluten-free and a teeny tiny loaf of gluten-free bread is over £3.  It's about 1/3 the size of a regular loaf which you can usually pick up on offer for about £1.  And we don't have milk, we have soy milk.  Mmmmm, yummy.  Jealous yet?  That's £1.49 a liter.

A lot of people who find food less expensive in the UK, are shopping at low cost stores, such as Aldi and Lidl.  If you shop at the same type of stores in the US, such as Aldi and Trader Joe's (same company), you'll find savings there.  It's 6 of one, half a dozen of the other. 

Personally the NHS hasn't been great to me.  I tend to have to have two to three private appointments a year for items that are not covered by the NHS.  I'm currently pregnant and needed a test for the baby which was not covered by the NHS which was £469 (this was recommended by the NHS.  This avoided amnio which has a very real risk of loss of life to the child, so we chose to pay out instead of risking baby's life).  As I enjoyed strong employment with great companys in the US, I had great insurance.  So for me, the NHS has been a backwards step.  I love the principle of it.  But it is a very broken system.  Way overstretched and desperate for funding.  In other words, while you won't have to (potentially) pay out for large insurance premiums, you may find you don't enjoy the same level of care you do now.

Nothing is ever an easy choice.  We talk about relocating to the US (primarily to be near family... and to possibly see the sun again).  It's tough!

When I moved to Scotland 9 years ago, I took a huge pay cut (I'm an engineer). 
Took some getting used to for certain.  9 years later,  as a staff engineer with direct reports,  I'm just about close to what I made as a very junior engineer in the USA.  But I don't think about it much anymore to be honest.  Some things cost more, some things don't. I have a very nice quality of life and I have lots of fun!!!
The only real thing I miss is putting away a large sum of money into my retirement pot. 

The milk thing is disturbing. Something is wrong. Likewise, real estate is now insane.

Somebody is making a pile of money. It isn't wage earners.

A 60k salary would be seen as incredibly high to most people, especially in Scotland.  If both of you are earning that in Scotland you can live pretty well.  Consider yourself lucky that software is one of the few industries where people are paid like humans, almost every other job has been devalued to pay roughly minimum wage.  A recent survey found that 4 in 10 adults don't have £500 in savings. 

When comparing salaries, make sure you are not looking at jobs in central London where the salaries are much higher to compensate for higher housing and commuting costs.

You guys could consider contracting, which is considerably more common here than in the US.  It works well for me and since I have my own company, I avoid that exploitation.

Also, something to bear in mind is that if you earn a salary of more than £43,000, you will be in the higher tax bracket, which means you pay £20% in income tax on your earnings between £11,000 and £43,000 and then 40% on anything earned above £43,000.

So, someone on a salary of £40,000 will take home £30,367 per year (not accounting for pension contributions). Someone on a salary of £50,000 will take home £36,466, and someone on a salary of £60,000 will take home £42,266 per year.

Dividends are taxed differently, hence the popularity of owning your own company.

Dividends are taxed differently, hence the popularity of owning your own company.

Indeed, my sister in law is a very well paid IT consultant (SAP) and last year she created her own company which is very easy to do. Lots of business expenses to subtract from earnings as she works away from home Monday through Friday then she pays herself a salary up to the top of the zero tax band and then the rest in the form of dividends, the first £5k at zero tax, the rest at 5%. She is very happy and was telling us all about it when we met up last October.