The British pound

Several job offers at that salary.  I realize it's not often that way, unless a US company is transferring you to the UK, but DH's degrees, know-how and experience is particularly in demand. While, I as I said am of your ordinary garden-variety vocation.

That's great.  But then surely you are earning more than $100k now? I think that's what you had stated a while ago when you were asking about the HSMP visa; wasn't it like $200k or something? 

Do you know what council London you will be in?  One thing I found is Westminster council has Very low council tax rates.  Band D property is only £687.62/year!  http://www.westminster.gov.uk/councilgovernmentanddemocracy/councils/counciltaxandfinance/bands.cfm

Where I live in Bucks my band D house is almost the same as a band H in Westminster!

Annual Zone 1-2 travelcard is £968.00 which is £80.67/month.  I suppose if you lived and worked in central London and the vast majority of your journeys were there that isn't so bad but it does go up rather dramatically if you go further out (or outside London).

I take your point on like-for-like costs Geeta.  But I suppose living in central London means you do not need a car and probably would have a much smaller place.  Yes, if you tried to have 2 cars and a 4 bedroom house in Central London, well, you probably don't have to worry about finances at all.

I understand about the Bands, thanks for that Matt. But I was being cautious and padding the council tax for the worst case scenario, give or take. I also compensated for the congestion zone tax, should that be necessary. But wahey! I'll pay any council tax over Texas property tax any day!

I do have to worry about finances! Because every pence I save I get to spend on frivolities (or savings, but that goes without saying.) Here's to frivolities!

That's great.  But then surely you are earning more than $100k now? I think that's what you had stated a while ago when you were asking about the HSMP visa; wasn't it like $200k or something? 

Well over $200k, but as I also stated that was gross profit before business expenses for DH's C corporation, which he (we think, not sure; depends what our accountant says) will be shutting down once we leave.  So £80k is much like his US net income.

I guess what I and a couple others here are trying to say is that my lifestyle is changing because I can move to London now, not the other way around. I didn't set out to decrease my expenses. I was sooooo ready to pay more to live in London. When I started working on this months ago, I just wanted to be aware of how much damage London was going to do to our income. Turns out...not a lot £500 or so annually? In exchange for...? Well, all that and a bag of crisps, too?

Finally, I'm a little distressed and confused that if ever anyone says London is cheaper for them than living in the US, a few seem to get really, acidly bent out of shape and start looking for reasons why those of us who say it are wrong-headed, feeble-minded, stupid, spendthrift oxygen thieves.

I don't think anyone is calling you or economists liars. (Oh, said that already, nevermind.) But since no economists have called me up to compare me personally, specifically and uniquely with my exact counterpart in the UK, I'll take their statistics as I believe they were intended...factual, accurate, broad-picture guidelines whereupon my mileage (and yours) may vary.

Of course living in London can be cheaper for you or for anyone else.  But I think it's important for people to know what they are getting into over in the UK.  You can live a good life here, have plenty of conveniences, etc.  But in general, to expect to have the exact lifestyle you had in the US - same type of house, same space, same yard, same cars, same furniture, same trips, everything - on the same budget is misguided.  I think that's why a lot of people are disappointed when they get over here and the honeymoon wears off.  It's going to cost more in the UK.  It's just a simple fact. 

You've said yourself - your lifestyle is changing.  And it is, surely - just by the way you've described it.  And it will now cost less. If you did the exact same thing in the US and downsized the way you're doing in the UK, it would cost even less.  ksand24 gave a perfect example (and she wasn't even in the major cities):

In the US this year I was earning about $12,000 a year as a grad student - with that I could afford to rent a 350 sq. ft. apartment (utilities included) for $475 a month and still have enough to buy clothes, any food I wanted to, go out for dinner, pay for internet and digital TV and make several trips across the country. In the UK I currently earn £13,000 and I can't even afford to move out of my parents' house because rent, bills and running a car will eat up my entire income (I calculated that I would have about £50 per month left over to pay for my cell phone and all social activities - and I'm trying to save up for either my own car and/or a deposit on a flat or house... although I'm worried that I will never be able to afford to own my own property with the high cost of housing here).

Well over $200k, but as I also stated that was gross profit before business expenses for DH's C corporation, which he (we think, not sure; depends what our accountant says) will be shutting down once we leave.  So £80k is much like his US net income.

But then that translates to $160,000.  Which is a lot more than $100,000 that you used in the example.  Or maybe I'm missing something, don't know.  It's late, I'm tired.

I take your point on like-for-like costs Geeta.  But I suppose living in central London means you do not need a car and probably would have a much smaller place.  Yes, if you tried to have 2 cars and a 4 bedroom house in Central London, well, you probably don't have to worry about finances at all.

Sorry, I missed this earlier.  This is my point exactly, matt.  That is what 'cost of living' means.  Like for like.  Apples with apples.  2 cars and a 4 bedroom house - wherever.  In Africa, New York, London, etc.  That's how cost of living is measured.  It's not a slight on anyone for saying 'well hey, but I have a better life in the UK!'  Great!  That's great!  But my guess is that it's not cheaper unless you have made some dramatic changes from your US life.

No, you might not need a car in Central London.  But if you wanted one - if you wanted to recreate your life exactly in the middle of London - how much would it cost?  That's how you measure cost of living.  Will it cost more for me to recreate my New York life in Central London?  The answer is...wait for it, people...yes.

Regarding my post about Westminster council earlier, that was a unique example as it is extremely cheap compared to most of London.  The Average band D council tax in London - £1,162 with Camden Council is over £1300/year.  Apparently, in Kensington & Chelsea there is even a Garden Charge:  http://www.rbkc.gov.uk/LocalTaxes/counciltax/gardens.asp.  Montpelier Gardens residents get particularly whacked!

Of course living in London can be cheaper for you or for anyone else.  But I think it's important for people to know what they are getting into over in the UK.  You can live a good life here, have plenty of conveniences, etc.  But in general, to expect to have the exact lifestyle you had in the US - same type of house, same space, same yard, same cars, same furniture, same trips, everything - on the same budget is misguided.  I think that's why a lot of people are disappointed when they get over here and the honeymoon wears off.  It's going to cost more in the UK.  It's just a simple fact. 

You've said yourself - your lifestyle is changing.  And it is, surely - just by the way you've described it.  And it will now cost less. If you did the exact same thing in the US and downsized the way you're doing in the UK, it would cost even less.  ksand24 gave a perfect example (and she wasn't even in the major cities):

But then that translates to $160,000.  Which is a lot more than $100,000 that you used in the example.  Or maybe I'm missing something, don't know.  It's late, I'm tired.

Well written and thoughtout. Last point first, what you're missing is "business expenses" which dwindle the gross profits down dangerously enough that I had to make that first post to get clarification in the first place.

The other thing you probably don't know is C Corporation means all net income is calculated and reported on business tax returns, but flows through to DH's and my "married-filing-jointly" personal tax return which then allocates half of it (and attending taxes) to me, at least in the eyes of the IRS. And that's the part that will not apply in the UK.

I too think it's important for people to know what a financial shock it may likely be for most to move from US to London UK. After all, that caveat is what I based my initial "London or Bust" musings and calculations on. I had fully intended to compare category-for-category and line item for line item in costing my immigration expenses. But then it dawned on me, "hey, unlike here where I live now, we don't need cars!" Once I deleted than entry, the auto loans, auto insurance, auto repairs, tax, stickers, registration, petrol, parking, tolls all went away. Not my intention, just a very happy coincidence of living in the city proper.

Now, if I moved to the city proper of Dallas, I'd still probably need one car, but the killer would be that the property taxes are 1/3 higher there   . More than eliminates any carless savings. Which is why I live here instead.

I want to mention to that I'm not a native Texan and between DH and I have lived and worked in Atlanta, New York City, Colorado, Santa Fe, Phoenix, Chicago and Georgia's East Coast and Boston. DH has actually owned/lived in/sold 23 different houses in different cities and states, so we're no strangers to comparing costs of living.

And if/when I bought a London area house, it wouldn't be fair or comparable to compare it to the cost of duplicating my current house and plopping it down in Mayfair, as I do not live that way now. I live in a suburb of a large city, much as I would do if I bought in London. I'd also put down at least 20%, just as I did with my US house to lower my month repayment schedule.

Last thing I'd like to say is remember that I said I wasn't attempting to sway anyone's thoughts or beliefs about whether London was more or less or breakeven expense-wise for them...only wanted to share my own personal circumstances. I believe that's useful and helpful to others just as well as any other information. And in closing as I must have typed several times, it will be different for everyone else. I don't imagine that DH and I are particularly a special case, so maybe others will find my outlay useful.

No, you might not need a car in Central London.  But if you wanted one - if you wanted to recreate your life exactly in the middle of London - how much would it cost?  That's how you measure cost of living.  Will it cost more for me to recreate my New York life in Central London?  The answer is...wait for it, people...yes.

But I don't live in the center of Dallas now, so I'm actually trading in cheaper suburban living for more expensive center of city London living.

This thread has been bugging me, as I think that a lot of the figures are nuts, so I thought I would add my view.

These are my rough calculations for a couple living in a one bed flat in the suburbs of London...

   
Council tax                          113
Building & contents ins             10
Utilities                                  50
Rent                                   900
     
Subtotal Housing                  1073

*Transportation

Zone 1-4 Oyster Card for two people  268


Dental check up every 6 months for two people (pro rata)    10
Eye check up every six months for two people (pro rata)      10             
(Prescriptions and glasses depend on how often they are needed)

Food, clothing
Food, meals at lunch (no meals out)                  200
Clothes, dry cleaning, repairs                            100     
Subtotal Food, clothing                           300

GRAND TOTAL                                              1661
----------------
But, realistically, this isn't the grand total.  You need to think about what happens if you break your glasses (£200), if you want more than 5 TV channels (£40), and broadband (£10), that you will go out and eat (another £250 per month) and if you go to the pub (£200).  But will you be happy in a one bedroom flat?  If you want a two bed then you are looking at rent going up by another £200 or £300 per month, which will increase the council tax by another £30 per month or more. Add the cell phone, the tv licence.  If you (like many US nationals) like to use your dryer, add £60 to your monthly utilities bills at least.  And, if you were spending $400 per month on clothes in the US, you will be spending £400 per month here.  At least.

While I agree that it can be done (as you can see by my budget I am an utter cheapskate!) I suspect that you might be unwilling to skimp quite so much when you get here.

Vicky
     

This thread has been bugging me, as I think that a lot of the figures are nuts, so I thought I would add my view.

These are my rough calculations for a couple living in a one bed flat in the suburbs of London...

   
Council tax                          113
Building & contents ins             10
Utilities                                  50
Rent                                   900
     
Subtotal Housing                  1073

*Transportation

Zone 1-4 Oyster Card for two people  268


Dental check up every 6 months for two people (pro rata)    10
Eye check up every six months for two people (pro rata)      10             
(Prescriptions and glasses depend on how often they are needed)

Food, clothing
Food, meals at lunch (no meals out)                  200
Clothes, dry cleaning, repairs                            100     
Subtotal Food, clothing                           300

GRAND TOTAL                                              1661
----------------
But, realistically, this isn't the grand total.  You need to think about what happens if you break your glasses (£200), if you want more than 5 TV channels (£40), and broadband (£10), that you will go out and eat (another £250 per month) and if you go to the pub (£200).  But will you be happy in a one bedroom flat?  If you want a two bed then you are looking at rent going up by another £200 or £300 per month, which will increase the council tax by another £30 per month or more. Add the cell phone, the tv licence.  If you (like many US nationals) like to use your dryer, add £60 to your monthly utilities bills at least.  And, if you were spending $400 per month on clothes in the US, you will be spending £400 per month here.  At least.

While I agree that it can be done (as you can see by my budget I am an utter cheapskate!) I suspect that you might be unwilling to skimp quite so much when you get here.

Vicky

Well done Ms. Vicky. Thank you for posting that. I do appreciate it. I, like you, am a cheapskate! Although I prefer the the term "domestic goddess" or "budget engineer". But, as I don't skimp here, I don't intend to skimp there.

Let me clarify too that the line items I listed are not all inclusive. There are quite a few I left out as the point I was making was that in my case, those necessary things that economists invariably list:  food, clothing, shelter, and less frequently healthcare/insurance and transportation.

But rest assured I've sussed the many other details as well: 
TV/satelite, mobiles, eating out, entertainment (films, museums), gifts, holidays, Christmas (has its own category in my spreadsheet), beauty care (mani-pedi, facials, waxing, hair salon, barber), land line home phone, long distance calls, charitable donations, meals at work, coffee houses, "mad money", books, newspapers, toiletries, household supplies, software, CDs, savings, emergency savings, ISA, regular savings, wine/liquor at home, fitness/sports club, tax preparation and advice, bank fees, hobbies, continuing education (might want to brush up on my French as I did a year ago.)

I deliberately left out unnecessary costs for brevities sake and because, well, here I go again at the risk of earning the threads wrath, but, well they are all comparable to what I pay now, some are even the "c" word and don't appreciably change my ratio of expenses/income in US vs. UK London.

For instance:

Mobiles (one each for DH and me):  $77 or £47 (same provider even--T-Mobile). Our broadband now is $61.70. Again, that's the bare minimum.

1)  As I posted earlier, we don't have premium channels on our satelite service (don't often watch TV at all.) And still it costs us $78.

2)  I am only spending $200 on clothes in the US. I figured £400 in London just as a frivolity.

3)  We have a dryer, but don't often use it; don't need to; once every 10 days for about 1.5  hours total. (I have friends who use their every blessed day, so I think I know what you mean.) I handwash and dry my unmentionables and such.

4)  The eyeglasses and prescriptions are pro-rated from the last 5 years. It could and may happen, but DH and I haven't lost our glasses since we were iddy-biddy kids. However, part of the UK insurance is an HSBC Healthcare Plus plan that reimburses for such things, as well as the co-pay for the twice annually check-ups.

I'm appreciative of your insight. Always a pleasure.

Okay, I'm going to take these one by one.  Slowly.

Well written and thoughtout. Last point first, what you're missing is "business expenses" which dwindle the gross profits down dangerously enough that I had to make that first post to get clarification in the first place.

The other thing you probably don't know is C Corporation means all net income is calculated and reported on business tax returns, but flows through to DH's and my "married-filing-jointly" personal tax return which then allocates half of it (and attending taxes) to me, at least in the eyes of the IRS. And that's the part that will not apply in the UK.

The main point I had is that in your example, you were equating 100k USD as your current family salary with 80k GBP that will be your salary in the UK.  But 100k USD doesn't sound like it is your salary now - it sounds like it's higher than that.  I don't know about all the stuff you've listed above - the point is, your example doesn't work if your take home salary is more than 100k USD.  And additionally, if you are adjusting your 200k USD for taxes, you need to adjust your 80k GBP as well.

I too think it's important for people to know what a financial shock it may likely be for most to move from US to London UK. After all, that caveat is what I based my initial "London or Bust" musings and calculations on. I had fully intended to compare category-for-category and line item for line item in costing my immigration expenses. But then it dawned on me, "hey, unlike here where I live now, we don't need cars!" Once I deleted than entry, the auto loans, auto insurance, auto repairs, tax, stickers, registration, petrol, parking, tolls all went away. Not my intention, just a very happy coincidence of living in the city proper.

Yes - for you.  However, some people who have two cars in the US might want a car in the UK.  And I fully understand that this is YOUR example and YOU might be better off in the UK.  But you are dramatically changing your lifestyle.  Not everyone will want to do that.

And if/when I bought a London area house, it wouldn't be fair or comparable to compare it to the cost of duplicating my current house and plopping it down in Mayfair, as I do not live that way now. I live in a suburb of a large city, much as I would do if I bought in London. I'd also put down at least 20%, just as I did with my US house to lower my month repayment schedule.

But that is just it - 'cost of living' is measured in exactly that way.  Taking a house and putting it anywhere - how much will it cost.

Last thing I'd like to say is remember that I said I wasn't attempting to sway anyone's thoughts or beliefs about whether London was more or less or breakeven expense-wise for them...only wanted to share my own personal circumstances. I believe that's useful and helpful to others just as well as any other information. And in closing as I must have typed several times, it will be different for everyone else. I don't imagine that DH and I are particularly a special case, so maybe others will find my outlay useful.

I disagree - you and your husband ARE a special case.  Not many people will be making the kind of money you are, and not many will be significantly downsizing their lives the way you are.  As you and your husband have lived in so many different cities, you will appreciate that it costs more to live in some places than others.

I know I've said this ad nauseum but just once more.

Cost of living is measured by how much something costs in any given place.  A given item in the UK will generally be cheaper in the US.  That's a fact.  Not everything, and not everywhere.  But in general - it will.  Why do most people on this forum do loads of shopping when they're in the US?  Why do the British take shopping holidays in New York and come back with suitcases full of things? Because it's cheaper there!

Cost of living differs from quality of living, which is what is being discussed now.  No one is discounting anyone's experience (other than disputing some of the quoted numbers), and of course everyone's situation is different.  But the original point being discussed was whether cost of living is higher or lower in the UK.  And the answer is that it's higher. 

Cost of living is measured by how much something costs in any given place.  A given item in the UK will generally be cheaper in the US.  That's a fact.  Not everything, and not everywhere.  But in general - it will.  Why do most people on this forum do loads of shopping when they're in the US?  Why do the British take shopping holidays in New York and come back with suitcases full of things? Because it's cheaper there!

Cost of living differs from quality of living, which is what is being discussed now.  No one is discounting anyone's experience (other than disputing some of the quoted numbers), and of course everyone's situation is different.  But the original point being discussed was whether cost of living is higher or lower in the UK.  And the answer is that it's higher. 

No, with respect, this is a wrong way to look at that, and I have to utterly disagree with you.  "The British" shop in the US because, FOR THEM, because of the exchange rate from their side of the coin, it's cheaper. But the US PRICES are not cheaper than the British prices IN SITU.

I'm sorry but I am one of those who notice that in fact things in Britain are generally priced very much cheaper or at least more fairly than in the US. Yes there is the issue of "Ah but salaries may be lower in the UK" -- and yes that is another wrinkle to the issue, but still it is wrong to talk about prices in real terms as being any higher.

I've been amazed at how low food prices, music CDs, movie DVD prices, and many more items in fact are for comparable items of comparable quality in my suburb of London. The one and only sticker shock I've had in terms of consumer goods is that a bottle of contact lens solution is pricier. I think I'm doing pretty good if that's the only thing I've found at least regarding consumer prices.

But for everything else, not just consumer items but even services of every kind, I'm sorry but US prices are "whatever we can get away with charging the fools" while in the UK I have very, VERY much noticed that that is still not generally the case and things are reasonable -- and I'm talking LONDON region too, not just some nice little village.

If it's any addition to the information flow here concerning STANDARD of living too:
I know a family in another London suburb whose incomes are merely average -- he's some kind of council housing officer and she is a part time doctor's office administrator and receptionist. They are not poor but not making a king's ransom either, I'm sure. As far as I know they are not also living off some stash of inherited money.

Compared to houses and yards and family car and general standard of living in the US, there is no difference in their lifestyle -- which is very gracious and plentiful -- than any American family I knew who were living modestly well back in the US. My friends live in a comparably spacious and very nice semi detached with an exstensive back and front yard, and they drive a large SUV. They live well and eat well. I am not on intimate terms with their finances but as an onlooker all I know is, I do not think any American would feel they were slumming it were they to find themselves in the shoes of this British family I'm describing, nor feel that they would have to deprive themselves of "frivolities" to live this way. My friends do not.

I'm NOT trying to be Pollyanna and lead innocent Americans to believe that the UK is some kind of unexpectedly cheap place to live, or that London is -- I know very well that especially London is not some land of milk, honey and cheapo living particulary regarding housing, it is NOT.

BUT -- I deeply believe that there are also people who have been burned in their own cases and are trying to impress too much the other direction that things here are going to be appallingly, outrageously expensive and also that any American is going to have to take a plummeting drop in standard of living and comfort level materially ---- and this is equally MISLEADING.

No, with respect, this is a wrong way to look at that, and I have to utterly disagree with you.  "The British" shop in the US because, FOR THEM, because of the exchange rate from their side of the coin, it's cheaper. But the PRICES are not cheaper IN SITU.

I'm sorry but I am one of those who notice that in fact things in Britain are generally priced very much cheaper or at least more fairly than in the US.

Sorry, I'm not getting what you mean here.  The exchange rate differences aren't the only reason people from the UK shop in the US.  In general, you can buy more for your pound/dollar/peso/rupee/whatever in the US than you can in the UK.   There are many measures of this - purchasing power parity - and it's been this way for a while now.

Have you heard of the Big Mac Index?  Take a look.

http://www.economist.com/finance/displaystory.cfm?story_id=11793125

Basically, a Big Mac costs $3.57 in the US (on average) and in Britain it costs $4.57 as at the date of the article.  It's a fact - the same item costs MORE in the UK than it does in the US.  Studies have been done for other items; a latte, for instance.

http://money.cnn.com/2004/01/16/news/funny/latteindex/

A latte at Starbucks cost $2.80 in the US but 17% more in the UK (study done in 2004).

Clearly these are not scientific but they are a good example of how much things cost across the world.  You can disagree if you like but there are many studies illustrating this discrepancy.  Now add in that salaries are lower in dollars in the UK than in the US.  So you earn less, but things cost more. 

I'm NOT trying to be Pollyanna and lead innocent Americans to believe that the UK is some kind of unexpectedly cheap place to live, or that London is -- I know very well that especially London is not some land of milk, honey and cheapo living particulary regarding housing, it is NOT.

BUT -- I deeply believe that there are also people who have been burned in their own cases and are trying to impress too much the other direction that things here are going to be appallingly, outrageously expensive and also that any American is going to have to take a plummeting drop in standard of living and comfort level materially ---- and this is equally MISLEADING.

I don't think so.  No one said anything is 'appalingly, outrageously expensive' or that you'd have to take a 'plummeting drop in standard of living'.  I sure haven't, and I don't recall anyone else saying so.  But personally, I'd rather think it was very expensive in the UK and be pleasantly surprised when I got here than have it be the other way round.  Because once you make the decision and spend all that time, energy and money to move over, you'd much rather have a bit more money at the end of a month than less, wouldn't you?

Sorry midnights_mom, but I just can't agree with you on this.

For example:
Say I make $38,000/year in the US and I buy a dress for $100.

In the UK I'd make £19,000/year (£21-22K in London) working at an equivalent job and I buy the same exact dress, priced at £100.

The price is the same in a relative sense, but this purchase is more expensive in the UK.  For most purchases, this will generally be the case (at least in my circumstances, because I moved from a medium-low cost of living area in the US.)  Salaries are lower in the UK, and the impact of this on cost of living cannot be underestimated.

However. I don't think a higher cost of living means that people are going to take a huge drop in standard of living when they move to the UK- I certainly didn't!  But if I still lived in the US and worked at a comparable job to the one I have, I'd have more disposible income to spend on things like dresses or to save.  That's all.  

xposted with geeta

I would agree that DVD's, some CD's and some food items (mainly basics bread/milk) are cheaper here.  

But I don't need DVD's and CD's to live.  

The question is, when did your friends buy that house?  If they bought even three years ago it would have been more reasonable.  

My friends bought a house three years ago that is very nice (2 bedrooms, 2 reception) and paid 130,000.  The same house next door is now on the market for 210,000.  Things are just getting harder here than they used to be.  

I think if you have money it is easy no matter where you are, if you are on benefits it is probably easier here in the UK (although I am not sure about that) but if you are just above the line it is easier in the US.