Need help in deciding...my company is offering to relocate me to London

Hi Everyone! Really stoked that I came across this site. Looks like it might be my new home for the next couple of years. I am looking for advice and answers on some questions regarding relocating to London. I need help in deciding from purely a financial perspective.

Quick background:
I am American and my wife is Japanese. We are currently living and working in Japan (I moved here about 7 years ago). Wife is also pregnant with our first child. If we accept my company's offer, we will be relocating a month or two after the baby comes. No expat offer just relo and become local hire (most likely on a type 2 Visa, which also concerns me).

My current salary in Tokyo is a little more than 9 million yen. My company came back with an offer of 64,000 pounds. For a straight conversion, this is a cut of about 1 million yen in salary. The company will cover the moving expenses, flying my family to London, and providing some temp housing while I look for our new place.

Based on the high taxes in London (it seems almost another 8-10% more than in Tokyo), rent, and food prices, this number seems low to me and might be difficult to live even close to the same standard of living in Japan. What is everyone's thoughts on this? I am basing my numbers off looking for a 2 bedroom flat in zone 2 (for example around St John's Wood area).

This would definitely be a great opportunity and career development opportunity for me, but at the same time, I am moving my entire family and away from our support structure and what is familiar and I am concerned that we will be barely able to get back.

Am I completely off base? What would one need to make to live comfortably in London with a family of 3 with a single income?

My role is in IT management, is this salary considered competitive locally?

Thanks!

Hiya, welcome to UKY!

I'm sure all the London experts and especially Denis the Mennace will pipe up (as he's good at these things!)  - and also a few folks have lived in Japan as well so can hopefully chime in too.

I don't have a lot of advise there, but I am a work visa holder myself- and yeah, it sure can be a daunting step, to decide to relocate to another country for a job!  No family around at all, having to learn everything by yourself with no resident spouse to lean on ,etc.  But that said, it has been one of the most rewarding things I have ever done!  

I did want to ask why being on a Tier 2 visa concerns you (or is it the lack of expat package that concerns you?)

And look around this board, there's loads of threads on London living and costs of living in London.  So hopefully that will help as well.  

You can't really compare your salary in Japan with your prospective salary in London, although isn't the cost of living very high in Tokyo as well? I didn't realize London was even higher than Tokyo. 64,000 pounds is a REALLY good salary, even in London. You will easily be able to live in London in a 2 bedroom flat on that. Many, many people live on far less than that and with larger families.

I lived in Japan and I've never had as good a quality of life as I did there.  You will likely not have as much disposable income, and probably not as nice a place to live (though I was in Osaka so I don't know what housing is like in Tokyo), but you will definitely be able to live comfortably in London on that salary. 

I'm not sure what kind of life to which you're accustomed, so I'll avoid commenting on that aspect of your post, apart from I personally, would be able to live quite comfortably on 64k/year in London.

This would definitely be a great opportunity and career development opportunity for me, but at the same time, I am moving my entire family and away from our support structure and what is familiar and I am concerned that we will be barely able to get back.

I say go for it!  I might try to negotiate for extra paid holiday to return/visit your family/friends in Japan.  Not sure what you're used to in Japan, (my better half works for a Japanese company, and it sounds like some of his colleagues work some pretty crazy hours over there), but here, people tend to get somewhere around 25-30 days paid holiday.. So make sure if your company is consistent with UK wages, they also provide similar UK benefits.

And, in the event that you're unhappy here, try to negotiate beforehand that if you don't like it, you still have opportunities in Japan should you decide to return. Although--I'm not sure how I'd personally go about demanding that..

I'm assuming the company would be covering for your visa costs; Would they also cover your dependents' visa applications (wife and child)?

Thanks for the comments everyone! Much appreciated. I would like to address some of the questions and hopefully elaborate on some of my original questions.

VISA Type 2 concerns
I guess my concern with this is that I would be limited to only work for my employer. I have no plans of leaving them, but this is just a bit scary to move my entire family and life to a new country and be locked to your employer. My concern would be if I lost my job (lay-off, etc.) or if I had a change of interest and wanted to find another job. It seems the UK job market is very difficult for non UK citizens and EU citizens. As an American, it seems I would be on the bottom of the list, especially since the government is making it very difficult to sponsor people. When I searched online, it seems I would have 2 months to find a new sponsor (job) if I were to lose my job and if I could not, I would have to leave the country. This is the part that really concerns me. Is this true, or would I be able to stay out the remaining time on my work permit visa and find another job? In Japan, I have a spousal visa, so no time limit whatsoever. Knowing you have a 60 day clock could make someone a bit nervous about moving their life there. If someone could provide me with a definitive answer on what the process is in the event you lose your job on a tier 2 Visa, I would greatly appreciate it. I have looked everywhere here (http://www.ukba.homeoffice.gov.uk/visas-immigration/working/tier2/general/workingandconditions/) and couldn't seem to find anything definitive.

Vacation Days
The vacation days they have offered me sounds in line with UK local standards. Thanks for pointing this out and confirming though!

Cost of Living & Taxes
Rent and Food prices in London (based on my research) definitely seem higher in London than they are in Tokyo. Tokyo ranks #1 on Mercer's report, but the problem with Mercer's report is that it analyzes everything in US dollars and based on NY. Well, seeing that the Japanese Yen has increases exponential in strength to the US dollar this report is a bit misleading. The Japanese yen went from 120 JPY = 1 USD 6 years ago to 76 JPY = 1 USD. Yes, Japan is expensive and you get smaller things, but you can definitely live cheaply and put away some nice savings.

I am using rightmove.co.uk to price apartments and along with this site (http://www.londonpropertywatch.co.uk/average_rental_prices.html). And rent prices definitely look higher in London than when compared to Tokyo. I am looking for a 2 bedroom NON shared apartment/flat for my wife and I in and around St John's Wood area as we were told this is a nice area. So far my apartment searched has lead me to believe I will be expected to pay somewhere between 1400 - 2000 GBP/month. With monthly spend on groceries, eating out, utilities, and rent, I am estimating for a family of 3 at around 3300-3500 GBP. Is this about right?

After estimating this number I have used this salary tax calculator (http://www.thesalarycalculator.co.uk/salary.php) which calculates my yearly salary of 64,000 pounds and deducts the national tax and national insurance tax. I'm assuming this calculator is correct, but this shows total monthly take home would be around 3658 GBP. Which would barely cover the monthly expenses. This would not include things like vacations, entertainment, and retirement/savings.

This is where I come to my conclusion that 64,000 pounds is not enough. Maybe I am off on my estimate of food spend. What would you say is the monthly spend on food for a family of 3 if you go out to eat 3 nights a week?

VISA Type 2 concerns
I guess my concern with this is that I would be limited to only work for my employer. I have no plans of leaving them, but this is just a bit scary to move my entire family and life to a new country and be locked to your employer.

Unfortunately, that is true - a Tier 2 visa is only valid while you are employed by the company who sponsored the visa.

However, it may be your only option when it comes to getting a visa for the UK. Unless you are married to a UK or EU citizen or you want to come here to study, it'll probably be a case of get a Tier 2 visa or don't move to the UK at all.

You're pretty lucky, because Tier 2 visas are almost impossible to qualify for unless you can get an Intra Company Transfer with your current company.

Vacation Days
The vacation days they have offered me sounds in line with UK local standards. Thanks for pointing this out and confirming though!

Legally, I think they have to offer you at least 4 weeks (20 days) of paid leave per year. Any more than this is at their discretion, but a lot of people get 25 days.

I am looking for a 2 bedroom NON shared apartment/flat for my wife and I in and around St John's Wood area as we were told this is a nice area. So far my apartment searched has lead me to believe I will be expected to pay somewhere between 1400 - 2000 GBP/month. With monthly spend on groceries, eating out, utilities, and rent, I am estimating for a family of 3 at around 3300-3500 GBP. Is this about right?

That's a lot of money, especially for a family of 3, even in London. Someone on another thread was estimating £3,000 per month in London for a family of 5 in a 4-bedroom house, and even that was an overestimate.

However, I think St Johns Wood is an expensive area of London. In other areas you can find 2-bed flats for much less - you could probably find somewhere in a nice, but less expensive, area for closer to £1,000 per month.

I'm assuming this calculator is correct, but this shows total monthly take home would be around 3658 GBP. Which would barely cover the monthly expenses. This would not include things like vacations, entertainment, and retirement/savings.

I think you're probably overestimating the monthly expenses. I rent a 2-bed house (120 miles north of London) and my monthly expenses (for one person) come to just over £800 per month (rent, council tax, gas, electricity, water, food, transport, broadband internet, satellite TV and phone line).

This is where I come to my conclusion that 64,000 pounds is not enough.

A salary of £64,000 would put you in the top 5% of earners in the country - 90% of the UK population earns less than £45,000 per year before tax and 95% earns less than £61,000.

The average salary in the UK is £26,000 per year (with the average household salary being £33,000), and plenty of people live in London on those amounts.

Maybe I am off on my estimate of food spend. What would you say is the monthly spend on food for a family of 3 if you go out to eat 3 nights a week?

Honestly, most people in the UK probably can't afford to eat out 3 nights a week.

I spend about £120 per month on food (for one person) and eat out maybe 4 times a month.

Thanks ksand24! Really appreciate the detailed responses. I guess I am estimating the numbers because I would like to live as comparable a lifestyle as I do now. 120 miles north of London is very far for me. I will be working downtown in Zone 1, so I want to live locally.

For example in Japan, I live central in a brand new apartment building in one of the expensive areas to live (Shinjuku), my wife and I eat out for lunch and dinner on all weekdays and eat in for breakfast/lunch on weekends and out on weekends.

Even given this in Tokyo, we still manage to save the equivalent of 1600 GBP a month. After looking at all this data, I really don't know how we do it other than the fact that Tokyo must not be all that expensive. Granted our meals out are 800-1400 JPY and we don't pay tips, etc. With the numbers I am running for this move, it just seems like we will be able to live a somewhat similar lifestyle but wont be able to put away any savings. And this is where I have to decide if this is a good move for us. I think my decision is going to have to come down to, I will move there for the job and to gain the experience and then make a decision based on how our standard of living is after 1-2 years.

Oh I forgot to ask about the Visa Tier 2 point you made. You mentioned how it's most likely going to be a Tier 2 inter company transfer Visa. Which I think is what it will be. You mention that getting the other is almost impossible. I think this is where my concern is.

If I do want to stay in London, but work for another company, how would one do that? I would no longer qualify for the inter company transfer visa, and as you mention the likelihood for getting the standard Tier 2 is very low, how do Americans on this visa get another job?

120 miles north of London is very far for me. I will be working downtown in Zone 1, so I want to live locally.

Oh, no I wasn't suggesting you live 120 miles away - I live in a whole different part of the country (where, admittedly, it is cheaper to live than London) .

I was just giving a living expenses example. While your rent, council tax and food/transport will be more, I doubt the basic utilities will be much different (water, gas, electricity, TV, internet, phone). I only spend £110 per month on those.

For example in Japan, I live central in a brand new apartment building in one of the expensive areas to live (Shinjuku), my wife and I eat out for lunch and dinner on all weekdays and eat in for breakfast/lunch on weekends and out on weekends.

The thing is, you can't really compare the two. The cost of living in London is going to be different than in Toyko and you're probably going to have to adjust accordingly.

Even given this in Tokyo, we still manage to save the equivalent of 1600 GBP a month. After looking at all this data, I really don't know how we do it other than the fact that Tokyo must not be all that expensive. Granted our meals out are 800-1400 JPY and we don't pay tips, etc.

Restaurants are expensive, so eating out is more of a luxury than an everyday experience for most people in the UK (unless you're talking fish and chips or indian takeaway ).

800-1400 JPN is only £7-11 in the UK - in London, a cheap/average restaurant meal is going to cost £10-20 per person (1200-2500 JPY).

With the numbers I am running for this move, it just seems like we will be able to live a somewhat similar lifestyle but wont be able to put away any savings.

Alternatively, you have the option of sacrificing a few of your current lifestyle staples and putting the money into savings instead.

I would estimate that in the UK, eating out for lunch and dinner during the week could potentially cost you as much as £30-40 per day for 2 people (£5 each for lunch, £10-15 each for dinner) - so in just one week, you would be spending more on food than I spend in 2 months!

Say you took your own food to work every day instead of eating out for lunch and only ate out for dinner maybe once or twice per week, you could save several thousand pounds in a year.

Oh I forgot to ask about the Visa Tier 2 point you made. You mentioned how it's most likely going to be a Tier 2 inter company transfer Visa. Which I think is what it will be.

If you will still be working for your current company, but for their branch in the UK, then it will be a Tier 2 ICT visa.

If I do want to stay in London, but work for another company, how would one do that? I would no longer qualify for the inter company transfer visa, and as you mention the likelihood for getting the standard Tier 2 is very low, how do Americans on this visa get another job?

Honestly, they usually don't. If they want to leave their job, often they will have to leave the UK as well.

The problem with getting a Tier 2 visa is that unless the job is listed on the UK skills shortage list, the UK company has to prove that there is not a single suitable candidate in all of the UK or any other EU country before they can hire you.

There are 500 million people in the EU, and we're still in recession, so millions of people are unemployed and looking for work at the moment (something like 50 UK candidates for every job). So, unless your field is so specialised that only a handful of people in the world are qualified to do it, it's going to very hard for a company to prove that out of 500 million people, you are the only possible person who can do the job.

As others have pointed out, £64,000 is a better than average salary for London and the UK in general.  However, no matter what the statistics say about a salary at that level it is fair to say that if you want to maintain your current lifestyle, which  is a completely reasonable desire, it may not be enough.  

It sounds like you have done your research and while this might be a great career move, you have determined that it might make you worse off financially in that you won't be able to maintain your current level of monthly savings.  Are you going to be ok with that or is going to make you miserable thinking about lost savings? Alternatively, you could eat out less and move farther out in order to be able to save but that would be a compromise to your current lifestyle and may also make you miserable.  

We live in Central London.  Our approximate monthly expenses are:

TV 45
Water 32--unmetered so we pay a flat rate/month
Phone/Internet 45
TV Licence 12
Mobiles for 2 people 70--we both have Blackberry's
Electric 75--we use the dryer a lot so this is probably high





  

Wait, are you saying you eat out every single meal during the week other than breakfast??

Thanks again all! Very informative. Thank you ksand24 and Anonymiss. And Anonymiss hit it right on the money. I really have to decide if this career move is worth it. I have definitely come accustomed to life in Tokyo and I'm really hoping I am overestimating on the costs in London and I end up being able to put away the money. But at the end of the day, I think this career move will be around 2 years, especially if I am unable to save money and life a lifestyle I want. It looks like the decision I will need to make is, can I live with that for 2 years and will this career move be that beneficial. I think yes, so looks like I will be doing this! But as Anonymiss states, wanting to maintain my current lifestyle is not a unreasonable request. So I will see what my company will do in this regard. I just wanted to do thorough research to make sure I am not going back to the table and making ridiculous requests.

Thanks everyone for all the input and advice. Really do appreciate it! I hope I can return the favor in the future.

Yes Geeta, I am saying I eat out practically every meal. Actually breakfast included,  not really a restaurant or sit down, but just banana and juice drink to go from the convenience store. In Japan, groceries are very expensive and the food you can get at restaurants are AMAZING and very affordable, so it's difficult to decide to eat in as you will roughly pay the same as eating out and then how good it tastes...well that's up to the chef in the kitchen. But looks like in London we wont be able to do this anymore...anyways my wife will want to cook home cooked japanese meals anyways more than likely. So who knows, maybe my monthly expense will be reduced.

But as Anonymiss states, wanting to maintain my current lifestyle is not a unreasonable request.

Yes, it's not unreasonable, but it may be the case that because of the difference in cost of living, it's not actually possible.

You mention below that you eat out a lot because groceries are expensive and restaurant food is amazing. So, it sounds like it's the case that you eat out in Tokyo because it's cheaper than eating at home.

However, in the UK, it's the other way around - restaurants are expensive and groceries are pretty cheap. So, in the UK, people tend to eat at home because it's cheaper than eating out (eating out often becomes a luxury for special occasions).

This may just be something that you're going to have to work around, because you would probably have to be a celebrity to earn enough money in the UK to eat out for almost every meal.

Also, something else to consider is the fact that you're going to have a baby in the family soon - and that's going to change how you do things anyway. You can't easily take a baby out to eat in a restaurant, or at least, it's not going to be easy to try to do that regularly. You're gonna have to factor in things like the baby's routine (nap times, feeding times etc.), getting a babysitter if you want to go out in the evening, the fact that your wife may be too tired or won't have time to eat out etc.

Yes Geeta, I am saying I eat out practically every meal. Actually breakfast included,  not really a restaurant or sit down, but just banana and juice drink to go from the convenience store. In Japan, groceries are very expensive and the food you can get at restaurants are AMAZING and very affordable, so it's difficult to decide to eat in as you will roughly pay the same as eating out and then how good it tastes...well that's up to the chef in the kitchen. But looks like in London we wont be able to do this anymore...anyways my wife will want to cook home cooked japanese meals anyways more than likely. So who knows, maybe my monthly expense will be reduced.

I just looked up a cost of living comparison between Tokyo and London:

- Rent prices are 0.5% higher in London, but consumer prices including rent are 14% lower
- Restaurant prices are 17% higher in London
- Groceries are 38% lower in London
- A meal in an inexpensive restaurant is 67% higher in London

London
Rent:
- 1-bed apartment in city centre is 10% more expensive
- 3-bed apartment in city centre is 14% cheaper

- 1-bed apartment outside city centre is 34% more expensive
- 3-bed apartment outside city centre is 7% more expensive

Food in London:
- milk is 46% cheaper
- bread is 44% cheaper
- cheese is 60% cheaper
- chicken is 11% cheaper
- apples, oranges and potatoes are 65% cheaper
- beer is 50% cheaper (imported beer 57% cheaper)
- wine is 38% cheaper

Monthly Utilities:
- Basic (gas, water, electricity etc.) is 39% more expensive
- Prepaid mobile phone tariff (1 min) is 77% cheaper
- Internet is 32% cheaper

Transport:
- one way ticket is 115% more expensive
- monthly pass is 51% more expensive
- gas is 11% more expensive
- new cars are 10% cheaper

Clothes and shoes are between 20% and 30% cheaper

Transport:
- one way ticket is 115% more expensive
- monthly pass is 51% more expensive
- gas is 11% more expensive
- new cars are 10% cheaper

This is very interesting.