Cost of Living in the UK

British Culture and Society Assignment

Prepared by : Siti Mundiroh – 2010060033

and Lestari J.K. - 2012060216

Cost of Living in the UK

Retrieved on December 24, 2013 from http://www.numbeo.com

The United Kingdom has been known to hold supreme world power for the past two centuries. Although the two world wars have greatly affected its status, it still remains as one of the most influential, wealthiest and most powerful countries in the modern era. It is the first industrialized country in the world, which has declined over the centuries but the UK remains one of the major economic powers in the globe.

At present, its economy ranks 5th with a GDP of over 2.3 trillion euros and a per capita GDP of over 35,000 euros. The cost of living in the United Kingdom can differ depending the person’s lifestyle and location. Some provinces and countryside areas can offer cheap and very affordable living conditions while the busy major cities are more appropriate for those with higher salaries and privileges.

London is one of the three command centers for commerce and international business in the world. Living in this major city will definitely be pricey and cost of goods and services can be twice as much compared to smaller towns in the United Kingdom. This was captured in Britain Expat Forum last January 6,2009:

But London is the hub of the country…..with a lot of high-paid jobs based there. But at the same time, they don’t call it one of the most expensive cities to live in the world for no reason. Prepare to SPEND when u live there…..almost all house prices are really expensive!

Over the past few years, the country remained as the world’s largest financial center due to efforts by the London Stock Exchange and other institutions. There are also a number of islands around which offer quality living. Expatriates in the meantime are interested in investing in London regardless of living rates and condition. As a testament, London would be hosting the 2012 Summer Olympics. This has been posted on Britain Expat Forum last March 24, 2009:

London can be a good place to live, but very expensive. Personally I like to be close enough to travel to London for the day when I like

The cost of food and drinks in the United Kingdom is generally high compared to other European nations. Most of the goods in major cities come from provincial harvests and are charged with value-added tax. Imported goods are also taxed which significantly increases their original value. The average Briton spends about 200 to 350 Euros every month on food. Grocery items and those found in supermarkets are possibly the cheapest expatriates can find. Some delis and community markets may offer lower costs depending on quality. This has been overshadowed though by a looming price increases as current prices have been their highest in a decade.

Employment Costs in the UK

Business, trade, stock exchange, commerce and tourism still comprise the bulk of the country’s financial support. Several slots are still available for expatriates in these areas. At present, the United Kingdom’s employment rate is at 95%, which is one of the highest in the world, but this is only for the time being with the financial recession’s effects still to be fully measured.

One of the nation’s strengths is equal distribution of occupations between the rural and urban areas. At the moment, the country is looking for more helping hands for health care centers and hospitals due to the rising number of sick people and aging individuals.

What income do people need to achieve a socially acceptable standard of living in 2013?

This year's updated figures show a continuing squeeze on incomes relative to rising costs, only partly alleviated by increased tax allowances.

Updated annually, MIS shows us the cost of items and activities the public think we all need for a decent standard of living. It also calculates the earnings required to enable different household types to achieve this living standard.

Single people need to earn at least £16,850 a year before tax in 2013 for a minimum acceptable living standard. Couples with two children need to earn at least £19,400 each.

The cost of the 'minimum' household budget of goods and services required for a decent standard of living is rising faster than the official rate of inflation.

Over the past five years, working-age benefits have deteriorated substantially relative to MIS. Out-of-work benefits remain well below MIS, but pensioners claiming Pension Credit receive incomes close to minimum requirements.

The jump in the personal tax allowance in April 2013 has slightly eased cost-of-living squeeze for those earning enough to claim it. But the benefits have been outweighed by cuts to tax credits and the rising cost of essentials.

Cost of Living Comparison Between United States and United Kingdom
Last update December 2013
Needed	US		UK		Difference
Meal, Inexpensive Restaurant	10.00 $		16.36 $		64%
Meal for 2, Mid-range Restaurant, Three-course	45.00 $		65.46 $		45%
Combo Meal at McDonalds or Similar	6.00 $		8.18 $		36%
Domestic Beer (0.5 liter draught)	3.50 $		4.91 $		40%
Imported Beer (0.33 liter bottle)	5.00 $		4.91 $		-2%
Cappuccino (regular)	3.70 $		3.80 $		3%
Coke/Pepsi (0.33 liter bottle)	1.50 $		1.64 $		9%
Water (0.33 liter bottle)	1.25 $		1.64 $		31%
Markets
Milk (regular), (1 liter)	1.00 $		1.55 $		55%
Loaf of Fresh White Bread (500g)	2.20 $		1.64 $		-26%
Rice (white), (1kg)	2.32 $		2.45 $		6%
Eggs (12)	2.00 $		3.27 $		64%
Local Cheese (1kg)	9.00 $		9.82 $		9%
Chicken Breasts (Boneless, Skinless), (1kg)	7.25 $		11.45 $		58%
Apples (1kg)	3.58 $		2.95 $		-18%
Oranges (1kg)	3.31 $		2.78 $		-16%
Tomato (1kg)	3.31 $		3.27 $		-1%
Potato (1kg)	2.20 $		1.96 $		-11%
Lettuce (1 head)	1.50 $		1.64 $		9%
Water (1.5 liter bottle)	1.79 $		1.64 $		-9%
Bottle of Wine (Mid-Range)	12.00 $		9.82 $		-18%
Domestic Beer (0.5 liter bottle)	2.00 $		2.86 $		43%
Imported Beer (0.33 liter bottle)	3.00 $		2.79 $		-7%
Pack of Cigarettes (Marlboro)	6.00 $		12.27 $		105%
Transportation
One-way Ticket (Local Transport)	2.00 $		3.44 $		72%
Monthly Pass (Regular Price)	65.00 $		98.18 $		51%
Taxi Start (Normal Tariff)	3.00 $		4.42 $		47%
Taxi 1km (Normal Tariff)	1.50 $		2.26 $		51%
Taxi 1hour Waiting (Normal Tariff)	28.00 $		32.73 $		17%
Gasoline (1 liter)	0.97 $		2.27 $		133%
Volkswagen Golf 1.4 90 KW Trendline (Or Equivalent New Car)	20,000.00 $		26,182.29 $		31%
Utilities (Monthly)
Basic (Electricity, Heating, Water, Garbage) for 85m2 Apartment	160.00 $		245.46 $		53%
1 min. of Prepaid Mobile Tariff Local (No Discounts or Plans)	0.12 $		0.25 $		105%
Internet (6 Mbps, Unlimited Data, Cable/ADSL)	45.00 $		32.73 $		-27%
Sports And Leisure
Fitness Club, Monthly Fee for 1 Adult	40.00 $		57.27 $		43%
Tennis Court Rent (1 Hour on Weekend)	20.00 $		16.36 $		-18%
Cinema, International Release, 1 Seat	10.00 $		13.09 $		31%
Clothing And Shoes
1 Pair of Jeans (Levis 501 Or Similar)	40.00 $		85.91 $		115%
1 Summer Dress in a Chain Store (Zara, H&M, ...)	35.00 $		49.09 $		40%
1 Pair of Nike Shoes	75.00 $		98.18 $		31%
1 Pair of Men Leather Shoes	80.00 $		98.18 $		23%
Rent Per Month
Apartment (1 bedroom) in City Centre	950.00 $		1,063.66 $		12%
Apartment (1 bedroom) Outside of Centre	725.00 $		900.02 $		24%
Apartment (3 bedrooms) in City Centre	1,600.00 $		1,963.67 $		23%
Apartment (3 bedrooms) Outside of Centre	1,200.00 $		1,472.75 $		23%
Buy Apartment Price
Price per Square Meter to Buy Apartment in City Centre	1,804.17 $		4,909.18 $		172%
Price per Square Meter to Buy Apartment Outside of Centre	1,254.00 $		4,090.98 $		226%
Salaries And Financing
Average Monthly Disposable Salary (After Tax)	3,220.00 $		2,945.51 $		-9%

Conversation about the costs of living in the UK based on the information from the website that updated on December 2013

A	:	London is one of wonderful cities in the world. I always dream to live there.
B	:	Yeah, it is. However, do you know that live in UK especially in London is very expensive compare to other cities?
A	:	Sure? How do you know about that?
B	:	Sure, I read the information in the internet. It reminds for two past centuries if I’m not mistaken. Almost all costs of living in London is higher than New York.
A	:	It would not be so expensive compares to the salary we get. As I know UK is the first industrialized country, the most influential, the wealthiest and most powerful countries, and the world’s largest financial center due to efforts by the London Stock Exchange and other institutions with a lot of high-paid jobs based there.
B	:	Yeah, the salary before tax there is quite good, but the tax there is so high.
A	:	What kinds of tax is it?
B	:	You know, most of the goods in major cities come from provincial harvests and are charged with value-added tax. Imported goods are also taxed which significantly increases their original value. In addition once you are settled in the UK you must pay taxes here. It is more complicated than that, but in principle if you reside here the government expects you to pay taxes here.
A	:	It's not clear enough for me. Could you give me some examples, please?
B	:	Ok, for example in meat and vegetables at most food shops are offered at high rates. Fish and seafood are expensive as well especially imported ones from Asia and the United States. There are differences price between the imported and local beverages but quality imported wines are the most expensive of all. And also home appliances such as electronic gadgets and trinkets are usually imported from Japan and are priced higher after tax.
A	:	What about the transportations there?
B	:	Actually, transportation in the United Kingdom is very efficient and state-of-the-art at reasonable rates. However, if you prefer to buy private vehicles it can be fairly expensive due to gas consumption and the price of the car itself that more expensive than anywhere else in the world since most of cars in UK are imported from Germany and Italy.
A	:	Well, it sounds quite expensive to live in the UK, especially London. So, could you tell me the minimum budget to live there?
B	:	As MIS statement, Single people need to earn at least £16,850 a year before tax in 2013 for a minimum acceptable living standard. Couples with two children need to earn at least £19,400 each.
A	:	Are all the costs of living in the UK are higher compare to the costs of living in the US?
B	:	Yeah, almost of them is higher than in the US. For example, if people only need to pay $ 10 for meal in inexpensive restaurant in US, they must pay for the same item at $ 16.36 in UK which means 64% higher than in the US. Another example is a pair of jeans in the US offered at $ 40, meanwhile it is offered at $ 85.91 in the UK which means 115% higher than in the US. However in internet service cost and loaf of fresh white bread price UK has the cheaper price than US. Internet service is cheaper 27% than US, and fresh white breads price is cheaper 26% than US.
A	:	Well, we can make a note then; London can be a good place to live, but very expensive.
B	:	Yeah, that's right. We need to earn much money to pay the high costs of living there.