Calculating salary against living cost in London BOROUGH

Hi all,

I have been struggling in calculating the living cost in UK if I live in London Borough, such as Redbridge, based on the salary I will receive, especially when my wife disabled. Thus, I am wondering if someone can provide some insight given my unique situation.

I have a job offer from one of the Big 4 consulting firm with a BASE salary of approx. GBP 49K plus a yearly allowance of GBP 8.6K that I can use for whatever I want (car - not taxable or cash - taxable), not including (potential) bonus of 14-25% every year. I will be living in Redbrige, which is considerably lower than in London. I did a budget calculation and it seems after all the regular living cost (see below), I don't have much left for emergency or savings:

- 900: rent
- 600: food
- 200: utility which include gas, water, phone, DSL, electricity, etc.
- 300: Misc household stuff, such as laundry
- 80 : car insurance and gas (the car and the maintenance are paid for by the company)
- 70 : monthly council tax

Would GBP 49K BASE pay enough to live in places like Redbridge for a family with 1 children, especially if my wife is disabled? To me it seems low, but maybe because in the US I have more buying power since things are cheaper (car, DSL, etc.)

Thanks.

In a word: Yes. That salary will more than cover your outgoings. I think you are over budgeting for some things though. £600 per month for food is a lot for a family of 3 unless you are having take aways every night.  You will probably find you spend around £400 per month on groceries.

Hi BritWife,

The food include eating out with the family once a week and for my lunch allowance when I am in the office.

If you don't mind me asking, where do you usually buy groceries? I went to Tesco.com and did some budget calculations and it seems it cost about 500 / month.

In the US, there are always sale going on, like buy 1 get 1 free a jug of milk so  it's cheaper. But then again.. so is most of the things.

The other thing that I'd like to emphasis is the fact that my wife is on a wheelchair, thus the living cost tends to be higher. I.e. she can't take the Tube because 90% of the stations are not wheelchair accessible, so she would have to take the cab or drive my car. The car itself cost a bit higher than normal car because it'll be modified for wheelchair accessibility, so I have to pay extra for that and the base car cost is paid by my company. I don't know yet how much the modification will cost, but I am afraid it'll be much higher just like in the US as follow:

- NEW unmodified Toyota Sienna van: US$ 25-28K
- NEW modified Toyota Sienna van: US$ 40- 45K

On the rent, is GBP 900 the going rate for a good 2-3 bedrooms apartment in Redbrige (or Wanstead) in a good location...say near a good school?

Oh, I forgot to mention: the recruting agency and the company have told me that the total salary I am getting, not counting the bonus, is very high compared to UK standard salary level. I am not sure if they're just saying that just to get me join the company, but I saw many job adverts with similar position as mine at the rate of GBP45K - GBP 60K for London location.

We shop at Tesco (that's all there is where we live now! If I had the choice, I'd choose Sainsburys - similar prices, better quality) and get a big delivery once a month which usually comes to about £150 which does not include fresh fruit/veg, meat, dairy etc and we spend maybe another £40-50 per week on that.  So we are only spending around £300-£400 per month but we don't buy a lot of ready meals as I prefer to cook things from scratch most of the time. If you buy ready prepared, then budget for a little more. There are lots of special offers all the time, buy one get one free, or discounts. (Also, my husband has to take a packed lunch as there isn't anywhere to buy it near his work).

The average salary in London is well under £30k so yes your salary is good for the area, but that doesn't necessarily mean it will buy you the same standard of living you are used to.

I am not sure of rents in that area, you could try looking at rightmove.com to get an idea.  I've no idea about anything to do with cars, never mind modifying one.   Maybe someone else will know where you can get a quote for that.

The other thing that I'd like to emphasis is the fact that my wife is on a wheelchair, thus the living cost tends to be higher. I.e. she can't take the Tube because 90% of the stations are not wheelchair accessible, so she would have to take the cab or drive my car.

I'm saying this without doing any research prior to posting (so forgive me) but I'm positive I've seen vans around with the Underground sign on them and on the doors it's says something along the lines of Dial-A-Ride.  Perhaps there is something that would assist your wife getting around town.  Just a thought... 

I am always surprised at groceries... I tend to do a big shop once a week of stuff (for 2 adults) and maybe pay £80 at the most, and that is a good week plus of food.  Where everything else seems to cost more over here, groceries are about the same as the States.  (I think because VAT is lower on a lot of groceries it helps).

Once we get a car, hopefully I can do a larger shop.  Right now it is hauling everything by hand from the store.

49K is a good salary, 8600 for the transportation allowance is very good.  You do spend more on housing then you are used to in the States, especially anywhere near London.  I moved over from a consulting firm (not one of the big ones, but competitive salary wise) and I would say that you want to be making at least 10% more in the UK then you were in the States as far as equal pay for the work.  So your salary would be essentially about $87K in US terms.  If you are making more then that in the UK now, I would say it isn't competitive.  On the other hand, I totally maxed out the pay scale for my position and they had to work some other money into the deal in order to get me, but they were desperate.

One consideration is the car, depending on what your wife needs are you going to have to go by tube/rail yourself.  An annual rail card is not cheap (depending on what you need £2000-£3000 per year).  One good advantage is that your wife can get a disabled rail card which will cut down on fares for those trains you can take.

49K is a very good salary, as far as I am aware. Even though jobs in London do tend to have higher salaries than the rest of the country, the average person gets paid between 25K and 30K, most likely with little or no extra allowance and perhaps only a few % bonus per year.

In terms of the cost of food/groceries, £600 for a family of 3 sounds extortionate to me. In my house, our monthly food bill for 5 people (including 2 very hungry teenage boys, who ate pretty much anything they could find) was an absolute maximum of £400 per month.

The national average for food costs in the UK is £15-£20 per person per week, so the monthly cost for 3 people should be more like £200-£300, not necessarily including meals out. Over here, we tend not to go out to eat that often compared to in the US (I have relatives in the states and have lived over there in the past) because it's more expensive and in my family was usually only for special occasions (we only eat out at a restaurant a couple of times a year - for birthdays), plus you can expect to pay about twice as much for restaurant food as in the US (i.e., a steak and dessert at TGI's can cost around $50 per person).

Thanks to everyone for your input. The information is what I need to adjust my budget as necessary. Since I don't know much about living in UK, it's hard to create a budget that is quite accurate and this will impact whether my salary is too low.

I'm saying this without doing any research prior to posting (so forgive me) but I'm positive I've seen vans around with the Underground sign on them and on the doors it's says something along the lines of Dial-A-Ride.

This is interesting. I'd definitely check it out, but I hope it's not like the service they have in the US, where my wife have to make an appointment 4-8 hours ahead of the time and sometimes the van is totally booked for the whole week, which makes it impractical.

49K is a good salary, 8600 for the transportation allowance is very good.  You do spend more on housing then you are used to in the States, especially anywhere near London.  I moved over from a consulting firm (not one of the big ones, but competitive salary wise) and I would say that you want to be making at least 10% more in the UK then you were in the States as far as equal pay for the work.  So your salary would be essentially about $87K in US terms.  If you are making more then that in the UK now, I would say it isn't competitive.

One consideration is the car, depending on what your wife needs are you going to have to go by tube/rail yourself.  An annual rail card is not cheap (depending on what you need £2000-£3000 per year).  One good advantage is that your wife can get a disabled rail card which will cut down on fares for those trains you can take.

Yes, I'll be taking the tube to work. I actually don't want to drive to the city. For my wife, when she drive to the city she does NOT have to pay the Congestion Charge since she will have the "blue" disabled placard. That's another reason why we're leaning toward her to drive instead of taking public transportation.

49K is a very good salary, as far as I am aware. Even though jobs in London do tend to have higher salaries than the rest of the country, the average person gets paid between 25K and 30K, most likely with little or no extra allowance and perhaps only a few % bonus per year.

In terms of the cost of food/groceries, £600 for a family of 3 sounds extortionate to me. In my house, our monthly food bill for 5 people (including 2 very hungry teenage boys, who ate pretty much anything they could find) was an absolute maximum of £400 per month.

Thanks for the info on the salary (Kitsonk and Ksand24). I was worried that I was underpaid, but it seems based on your information and my research on the Internet, it seems to be above average and most importantly, more than sufficient to support a family of 3.

The food/groceries cost is an estimate that I put together based on the items we'll purchasing. That works out to about GBP 20 / day, which I though is sufficient for 3 meals / day plus miscelanous snacks. Ksand24, do you also shop at Tesco?

Hi Lanwarrior!

2 sections to my post here

first one - I'm about to save you a good wedge of money for the car and the fact your better half is wheelchair bound. I employ a member of staff (he's my Programmer!) who is in a wheelchair - he can drive and from a conversation with him recently, he tried ALOT of different cars that he felt comfortable with, easy to get his wheelchair in and out of. The 'actual' car didn't matter so much - just had to be a 5 door hatchback, as his wheelchair would be transported where the back seats are. He came up trumps with a Honda Jazz Automatic. The steering and pedal modification certainly didn't run into thousands! - I will ask him on Monday what the cost was etc. I do seem to remember he has the 'pull' for 'pressing the accelerator and 'push for the brake' - again I'll need to look at his car on Monday (or sometime next week!) to be better able to report to you.

Of course, I understand yoru wife's disability may be different to my staff members and to effectively allow her a smooth transport system within a car may cost alot more - but from what you've said just now, it 'seems' to be pretty much the same as my staff member. I'll also get you a price he paid for the conversion assembly (off the top of my head I recall a figure of £700-800.

second point - your budget. There are other posts which I've posted in where I listed many of the 'hidden' or 'less thought of aspects of personal finance. I'll have to write up an article and see if the board admins will make it a sticky.

however, I'll list some of the points here

1. Budgetfor Savings
2. Budget for Price increases
3. Budget for utility price increases.
4. Budget for Insurance (home, life, contents, theft, buildings etc) & their possible hikes.
5. Budget for Council tax hikes (I think your current 70 quid is a little low - my2 bed flat/apartment is I think £84/month and like Redbridge is an outskirts of London area, so is Slough, so roughly comparable - I'd say bump that up to around 90-110/month then factor in the inevitable increases)
6. Budget for Unexpected Maintenence costs
7. Budget for Emergency repairs/trouble
8. Budget for a Emergency 'cash' stash

lastly, budget for variances in all the stuff you'll buy, Petrol, phone bills, utility bills mainly can vary substantially month to month (beleive me, I speak from experience after a phone bill went from £23 every month to £600! - I forgot to check if the access number was included in my calltime bundle, it wasn't and I $hat myself when that bill popped through!)

Of course, there are other elements which you personally in your lifestyle only know about (holidays, impulse buying, clothes, etc etc etc) and some of the above I've mentioned you may have already bundled into your misc item listing.

Overall though, 49K +8.5K total £57.5K is a top notch salary, UK average is 23K (and the REAL way to compare is the median average, which makes the UK's median salary at just over 17K - I think I should start to quote the other financial sites I read these figures from soon!!)  which places you firmly in 'top dosh' earners. I think with you keeping a good eye on your finances, you'll be very comfortable.

It's fri night/sat am and it's 140 am...  I've had my fun for the evening, im off to sleep! I'll start writing up that article maybe later today!

Hope this helps - Cheers! DtM! West London & Slough UK!

You're lucky to be offered a salary of around 50K - getting paid that much is a dream for most of us! I'm currently a grad student and will either start a PhD or begin looking for jobs in the next year, but even with a PhD, I'll mostly likely be looking at a starting salary of less than 25K. The average graduate starting salary is about 16K!

In answer to your question, yes I do shop at Tesco (although my parents do right now because I've moved back home while I'm doing my masters) and I also shop at Somerfield for certain items. We spend somewhere between £40 and £50 per week in each store for the whole family.

My relatives in the states spend a lot of money on groceries (more than $100 on a quick trip to the supermarket, several times a week) and my jaw drops at the cost because we're pretty careful with what we buy in the UK.

Also, you may find you need to adjust the food items you buy once you arrive, because British food, even the same brands, tastes different here compared to the US. There will be many items that you can buy in the US that are not even sold over here and there will also be food here that you've probably never even heard of and it can be hard to adjust to the differences!

I studied in the US for a year and it took months for me to adjust to the taste of bread, milk, cheese etc.!

In terms of the cost of food/groceries, £600 for a family of 3 sounds extortionate to me. In my house, our monthly food bill for 5 people (including 2 very hungry teenage boys, who ate pretty much anything they could find) was an absolute maximum of £400 per month.

Family of only 4 here (2 little ones w/o gigantic appetites) and our grocery bill runs very close to 600 GBP and I don't think it's too high of an estimate.  Close friend of mine, family of 5 (little ones too) can't manage to stay within 600 per month for groceries...busts it every time.  I've done the Tesco thing and I stay away b/c I get frustrated with the other shoppers.  I like Sainsburys and their quality and Waitrose is wonderful.  Both deliver and if you spend over 90 GBP delivery is free (at least w/ Waitrose).  Makes it nice once you get used to the differences in foods and what each has available in the store and on-line. 

Just searched a bit about the dial-a-ride...here's the link and hopefully it can provide you with some information.  http://www.tfl.gov.uk/dial-a-ride/

Just sticking my 2 cents in...a 49k+ salary is VERY nice for London area.  My boyfriend (though single, which I know is different) makes a good 1/3 of that and lives in Central London (zone 2) fairly easily.  Yes, the cost of living is high, but it's obviously not so unaffordable that people can't do it.  Considering the average and/or median salary for a Londoner is much lower than that figure, I can't anticipate many financial problems (plus the fact that your car is supplied helps a lot).

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5. Budget for Council tax hikes (I think your current 70 quid is a little low - my2 bed flat/apartment is I think £84/month and like Redbridge is an outskirts of London area, so is Slough, so roughly comparable -

I pay about £80 a month for a 2 bedroom flat in York. How can your council tax be the same as mine, with you living close to London and me living up north? Or is it that are you taking the 25% discount for living alone, while I live with someone?

You'd be surprised whats different councils charge, it is not related to where you live as what services your council provides. When I lived in Westminster council area, the council tax was very low. In Inverness we pay more council tax than we did in Islington even.

Sweetpeach, yes, the renter is a single woman and so gets the 25% discount. I totally forgot about that! so 'really' the council tax rate for my rental apartment is indeed around £105-110 ish per month.
For the OP, I think it still stands that your council tax estimate so far is a little low, but taking Britwife's comment, it's entirely possible that the 70 quid figure is indeed correct.

Cheers! DtM! West London & Slough UK!