The British pound

Again with the acerbic condescending tone, eh? Now-now, play nice with the other kids.

...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 suspect the first sentence is the problem. You're not hearing the difference between "salary" and "income". Understandably as we all, myself included, tend to use the two words inchangeably. However, and as any economist will also tell you, they are not one and the same. I won't bore you and everyone else with dissertations on it. It's quite dry stuff, honestly.

But at the simplest level, gross business income is pre-business expenses; the corp. earns the income; then pays its expenses; what's left is business net income. In a C corp, the net income (after business expenses), is then transfered to personal gross income. At which time, it can then be subjected to further tax deductions. DH can take as little or as much as it likes. (The rest stays in the corporation as a business asset.)

He takes $100,000. And no, he won't/can't/doesn't have to apply the same principle to UK "salary" because their laws are not the same. The only common ground is how the net $100,000 will compare to the offered £80,000 "salary". That is the point at which both the US and the UK begin to adjust for fed/state taxes, FICA, NIN taxes, etc. (See, told ya it's dry stuff!  )

Yes - for you...And I fully understand that this is YOUR example and YOU might be better off in the UK...

And that's what I've been saying all along. Phew!

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.

Have to strongly disagree there. I suspect it's more accurate to say that not many people making the kind of money I'm talking about will ever want to admit it on this forum. (I only first put forth our own because it was necessary to be specific to get the answer to a troubling visa question. Thank you Ms. Vicky! And now to use as an example for others who may be puzzled with the same issues, as I don't imagine that I'm unique in the US-to-UK immigration thing.)

But there are people on this very forum who do or will earn a similarly high UK salary. US inter-corporate transfers come immediately to mind.  I've read threads on here by some who've heretofore been quite reluctant to say so (as I was) for fear of this very sort of consternation. It stands to reason that if £45k salary is an expected norm, (as I believe someone stated earlier) then if both hubby and wife are similarly employed, then household income is actually £90k. That's more £10k more than the £80k I used.

Cost of living is measured by how much something costs in any given place.

Then surely you'll agree that I've increased/increased my exposure to high-cost living by plopping myself down in a rented flat in the city center, rather than buying a house in the 'burbs? That's more expensive, not less so. And, don't forget I'm building 0 equity to contribute towards my personal wealth. Rather, that expense comes straight off the bottom line of my net worth. And yet, for me that cost of inner city housing and its attending upkeep will be cheaper on my monthly outlay for me.

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. 

Emphasis is mine. And exactly my point.

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!

Quite so, at least where clothing is concerned, (other items I find to be much friendlier to my wallet), which is why I doubled my outlay for the UK from $200/per month pro rata to £400/per month pro rata. Overkill perhaps, but still it doesn't kill the cost-of-living grand total.

No one is discounting anyone's experience (other than disputing some of the quoted numbers), and of course everyone's situation is different.

And yet, Vicky's (a native Uk-er's) numbers bare me out. 

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. 

Actually, the original point here (excluding our hijacking of the OP's topic of "The British Pound" exchange rate) was put forward by the poor girl who said she finds that for her, living in the UK was no more expensive overall than living in the US. IIRC, she was not a homeowner in either country. She's long since disappeared from this thread, no doubt, too uncomfortable with the subsequent ire of replies. Shame, really, as I suspect it also put other guests off from speaking, as well. And the answer is, to quote you, "...not everything, and not everywhere...and of course everyone's situation is different. Of course living in London can be cheaper for you or for anyone else."

Actually, I said the average household income in the UK was about £34,000. 

My husband was offered a job in London for 45,000 but I wouldn't say that was usual.  He has quite a few attributes that make him a special candidate.

If you and your husband are going to earn 80,000 you are making more money than 99% of the population.   Your income doesn't even register on the scale the site provides.

http://www.ifs.org.uk/wheredoyoufitin/

I am sure there are some people on this site that also fit into that category, but I doubt that there are many.

And the answer is, to quote you, "...not everything, and not everywhere...and of course everyone's situation is different. Of course living in London can be cheaper for you or for anyone else."

Of course living in London will be cheaper, because you are downsizing.  But that doesn't have to do with London, you could move to Boston.  They have excellent public transportation, the state has healthcare requirements which make it cheaper than most US states, you can get your basic 13 TV channels on an antenna for free and renting, while expensive, is not as expensive as London.

Not a clue what you mean by acerbic tone, but whatever, your opinion.  Yes, LadyAnglesley, we all get the point that for you, life will be cheaper in the UK.  That's great.  But I completely disagree that there are many people on this forum who will be in the same earnings range as you and your husband (as bookgrl has just posted).  I've been on here for four years, and I'm quite sure there are a lot more posts about 'how can I show we've got enough money to live in the UK to get a visa' and 'are we eligible for benefits' rather than the opposite.

I don't think Vicky's numbers prove your point either - she posted those because she thought your figures were off the mark, in fact.

I'm not going to try to imagine why the OP hasn't posted...in fact, I'm not even sure who you're talking about.  Perhaps people aren't posting because they're not sure of what they'd say, or they're scared of saying something wrong, or they just don't know enough about economics.  The discussion has moved from that of the pound's strength versus the dollar to cost of living.  And I'm sure you will have a very comfortable life here.  But it's just WRONG to say that the cost of living in the UK is less than that in the US.  Quality of a person's life might be better in the UK.  Heck, if your significant other is in the UK and you are not, I'd venture to say you don't care about the cost - your quality of life is just plain better in the UK.  But cost is a different story.  As springhaze said, it's objective, not subjective.  It's measured by common factors that are readily available and is easily accessible anywhere on the net.  

Now-now, play nice with the other kids.

And personally, I find this a lot more condescending than anything I've posted thus far.

LadyAnglesey, I'd be curious how your experience works out once you get here.  It may be much better or worse off than you anticipated.  No matter how much we anticipate and plan, things are always different than we imagine. 

Indeed phatbeetle. I plan to keep the forum updated as I'm sure everyone's experiences helps everyone else. I know there will be surprises, both good and bad. Life's like that. But I've become very good at tightly estimating costing of making moves over the decades, so have faith! Thanks for your concern.

This thread went OT when I jumped down ancmc's throat for her innocent comment that was totally on-topic.  I've apologized to the board, I've apologized to ancmc.  She was very gracious indeed. 

Reason she's not around is that today is her moving day.  I'll bet that the OP, treacle, is probably scrambling to get moved over too and figure out how she's going afford to live on her student loan money.

I saw this yesterday but avoided posting because I knew which direction the discussion would go anyway!

Although I believe in the like-to-like comparison geeta promotes, I'll leave that as I can see how you're trying to view your own personal situation which is fair enough.  However, I do think you need to still make some adjustments if you are trying to gauge the financial impact for your own situation.

(1) On rare occasion is comparing a mortgage to rent fair.  Your mortgage is impacted by downpayment, mortgage length, interest rates, etc.  Your $1061 could be $800 interest and $261 building equity.  In that case, the cost is just $800 a month not $1061 as the rest is building savings.  Also rents rise over time while a fixed rate mortgage in the US never goes up.  Lastly, property goes up in value in the long-term (not so in the current short term!).  This all makes rent vs mortgage a bad comparison.  Instead, consider how much your current US place would cost/month if you were renting and use that instead.

(2) You subtract property taxes but not income taxes.  By your account, Texas is kind in income tax but punitive in property tax.  US 2007 taxes on $100,000 for a couple are $13,473 federal (assuming standard deduction + 2 exemptions) and $9,100 social security while 2007 UK taxes on £10K+£70K are £4135 NI tax and £20,197 income tax.  Therefore I would add to your exhibit $1881 and £2028 for income taxes.

(3) You put 2 cars in at a cost of $1021.  As you mentioned your cars last 8-10 years, make sure the loan you use to calc monthly payments is an 8 year loan and on inexpensive cars not a BMW and a Lexus!  If not then part of your payment is building equity/savings.  Two $20,000 cars on 10% 8 year laons cost $607 a month.  Also, like a mortgage your car payment wont go up but London transport isn't so lucky!  You should also assume you will rent a car from time-to-time, my budget when I first moved here (pre-kids, pre-car!)assumed once every other month we rented a car for a long weekend, approx £130 + fuel costs.

(4) Travel home - not sure if you visit family often but if you do, count the airline cost of 1 or 2 visits to the US each year.

Again, these changes are meant to make it more "like-to-like" for your specific situation.  Having said the above, in my case I never concentrate on what a move does to my costs but instead to my savings.  Why should you care if your costs double when if you move to London your savings triple!

There are indeed a few lucky professions which are in demand over here and so pay better than they do in the US, glad your other half is one of the lucky!  Plus once you get to London the career opportunities are probably much greater than in Texas so in a few years the salary is more likely to move up significantly as well.

Most important though, it's a great experience living in a foreign land, good luck!

I agree with mbmasters, but most of all with this point.

Most important though, it's a great experience living in a foreign land, good luck!

I don't think Vicky's numbers prove your point either - she posted those because she thought your figures were off the mark, in fact.

Yes, that was my point exactly.

I do feel that there is the danger of a bit of a shock if someone feels they can save loads of money moving to the UK.  There are always hidden extras that don't immediately spring to mind.


Vicky

Yes, that was my point exactly.

I do feel that there is the danger of a bit of a shock if someone feels they can save loads of money moving to the UK.  There are always hidden extras that don't immediately spring to mind.


Vicky

Thanks you Ms. Vicky, but now you've confused me. Can you explain your thinking behind my UK figures being off kelter:

                                      Ms. Vicky's                   Mine/UK           Mine/US
Council tax                          113                            90                    550
Building & contents ins             10                           12                      93
Utilities                                  50                           73                    468
Rent                                   900                         1950                  1061
     
Subtotal Housing                  1073                         2125                  2172

**Ms. Vicky's figures do not include a comparison of housing upkeep as mine do as she does not own.

Geeta, it seems you and I will have to do the proverbial agree that we disagree. I apologize that you found my opening remark condescending, but I found your "slowly" equally so.

However, in the interest of forum harmony, I will, in future, assume that any such remark as that is intended in the kindest, most gracious manner and simply worded badly. I will also assume that you and I will both take more care so as not to come off as churlish.

Onto the Mickey D's and such. Those are interesting costings scales, seriously. But if, as someone said, you don't buy CD's and such, then the cost of them is no matter to you. Likewise, I don't eat fast food, nor do I frequent Starbucks. I also don't drink, but we suppose new friends will.

"Midnights_mom"''s post is the one I'm referring to. I thought you'd recall it, as you replied to it.

After all, I started this discussion with these very words:

"I'm also not saying either that it's cheaper to live in the UK and economists are all liars; nor that is more expensive to live in the UK."

As you say it's very, very useful for potential immigrants to understand the sticker shock they may be in for. But isn't it at least as helpful for them to know that it isn't the end of the world? And yet each time someone tries to point this out, you pounce on them. Isn't at least fairer for you to note that, "while strict economists model prove X overall, specifically, your mileage may vary"?

I can't help but wonder if I'd found this forum before I'd already made the decision to move to London, if I wouldn't have simply thrown up both hands and banished the thought.

Never have I said that economists cost-of-living for London/UK vs. Dallas/Fort Worth/US was wrong, inaccurate, lies, etc. In fact, I said quite the opposite. However, keep in mind that by its nature economists figures are means, averages and the like. My neighbors' house across the street is valued at $mine+'X', while being the same size and configuration; while at the same time, my net door neighbors's is valued at $mine-'X'. An economist's model necessarily averages these 3 or takes the mean, not the exact house. Therein lies the leverage.

And as far, as apples-to-apples, economist-wise, I would have to either purchase a like property in a like London suburb at 1998 dollars and 1998 UK economic conditions (the year I bought my US house) for the apples-to-apples to be accurate. Conversely, I could purchase my house today and then compare it to what it would cost to purchase a like house in the UK, or vice-versa.

I'd also have to remove 10 years of equity (on a 15-yr mortgage), plus the 20% downpayment I put into the house 10 years ago in order for it to be a fair economist-wise comparison. Or something outrageous like finding a UK vendor willing to give me the 66.66% equity they have in their house, plus 20% and accept payment of 33% of the home's value as payment-in-full.

And that would do no favours to a strict London-is-more-expensive model; while broadly statistically, it's true. Because by that strict model, I still come out pretty favourably in the housing division. Perhaps not equally, but not in dire straights either. Now that's more truly apples-to-apples.

You've said that your intention is for potential US-to-UK immigrants to be prepared for the worse, even if they're pleasantly surprised otherwise. Admirably, but I'd say you're taking a lot on yourself. Isn't it as helpful that the conclusion lie with the immigrant? That they be presented with a more rounded picture? Facts, individual examples, projections, warts and all, for better or for worse and make up their own minds whether UK will be more or less expensive for them...or simply a wash?

Thanks you Ms. Vicky, but now you've confused me. Can you explain your thinking behind my UK figures being off kelter:

                                      Ms. Vicky's                   Mine/UK           Mine/US
Council tax                          113                            90                    550
Building & contents ins             10                           12                      93
Utilities                                  50                           73                    468
Rent                                   900                         1950                  1061
     
Subtotal Housing                  1073                         2125                  2172

**Ms. Vicky's figures do not include a comparison of housing upkeep as mine do as she does not own.

Please drop the 'Ms'.  It's just 'Vicky' 

Your estimates on these things were pretty accurate.  I am concerned about missed 'hidden' charges, especially transport costs, as detailed in my post.  And, as has been said, this might not be that relevant for you, but there are many on this board who find things a struggle here, and have been forced into a massive change of lifestyle...and I don;t mean of the 'I can't get Sky' nature, but of the 'I can't go the cinema and my husband has to work 7 days a week' kind.

Vicky

[Mod note]

Let's just exchange information and opinions and keep the snidey comments to a minimum, please.  We're all grown-ups.  We all know how to get along with others.

Actually, I never said I wanted potential immigrants to be prepared for the worst.  I said I would prefer to think it was very expensive (which I still believe it is, and that's my opinion, not a fact) than the opposite.  I am conservative by nature and I wouldn't ever want to get in situation where I thought I could afford a lifestyle to find out I couldn't after all.

Your opinion, which, I might add, is just as valid as mine, is that you don't think it's very expensive for you, and you've provided figures to show why you feel that way.  That's fine!  I have no problem with that!  (other than I don't agree with some of your figures, but fine, whatever.)  

However, the point I've been trying to make (and I think I have quite clearly made it for some people following this) is that the fact is that the cost of living in the UK is generally higher than in the US.  Maybe your cost of living will be lower and mine won't.  Maybe ksand24's will be higher in the UK and Midnight_mom's won't.  That's all fine.  But the fact is that in general it is more expensive to live in the UK.

The point about the Big Mac and Starbucks indexes aren't that people who consume those things will feel the difference.  They are representative items that are the exact same in all countries but for some reason are priced differently.  That's the theory of purchasing power parity.  It says that the cost of a good in one place should be the exact same in another.  The problem is that the theory doesn't hold.  The prices of most goods and services are NOT the same across the world.

I do feel that there is the danger of a bit of a shock if someone feels they can save loads of money moving to the UK.  There are always hidden extras that don't immediately spring to mind.

I agree with this quote of Vicky's.  

As you say it's very, very useful for potential immigrants to understand the sticker shock they may be in for. But isn't it at least as helpful for them to know that it isn't the end of the world? And yet each time someone tries to point this out, you pounce on them. Isn't at least fairer for you to note that, "while strict economists model prove X overall, specifically, your mileage may vary"?

And I'm not 'pouncing' on anyone, unless they continue to assert the idea that 'cost of living' is cheaper in the UK than it is in the US.  Because that's just not true.  It's like saying 'the sky is red' or 'the earth is flat'.  I don't think anyone who comes across this forum should read information like that and go off believing it.  Yes, YOUR lifestyle might not cost more than it does in the UK.  But the actual cost of living as defined in a textbook and in the financial markets, on average, is higher in the UK than it is in the US.

It's like when people post incorrect information on the visa part of this forum.  It's important people know the facts, other posters' opinions, and then make up their own mind.