Image source (This is London)
Someone emailed me asking me about relocating from Singapore to London. More precisely, he asked me about what was considered as a decent relocation package. From what I understood, he's currently making a comfortable living back home and is still two minds about uprooting himself and live halfway cross the globe.
I guess some relocate for a better pay while others move for a more desirable lifestyle though rarely for both. At the end of the day, we have to be quite clear about why we move in the first place. More importantly, different places may suit our needs at each stage of our lives. Though I hope my replies to him have addressed his concerns, I thought it would be great to list down some of the main costs of living in London in this post and hopefully get some feedback from you.
I read from somewhere that it's common to pay up to a third of your salary on your accomodation. I'm not sure how true that is but it really depends on the individual. In my London Accomodation Guide, I gave a rough estimate on the monthly rental and upkeep to expect for your accomodation.
The usual factors include size (usually in terms of number of bedrooms), proximity to the City and basic amenities and the area (some are more upmarket than others). For a one bed-room flat in Zone 1, be prepared to fork out at least £1200 for the rental alone.
However, if you are negotiating for a relocation package and had to look for your own accommodation, request for the firm to put you up somewhere for at least 3 weeks while you hunt for a more permanent place. Believe me, it takes that long and you won't want to rush into anything that you might regret later.
With the recent Tube and Bus fare increase to cover London Transport's ballooning deficit, it's high time one should get a Travelcard, especially those who are doing regular commuting. I gave a breakdown of savings earlier and you could be looking at savings of a couple of hundred pounds annually.
Depending on the extent that you'll be travelling, set aside at least £4 per day if you are travelling within Zone 1. For more information on travel fares, refer to Transport For London.
If you're banking on homecook food, it's really not that expensive to feed yourself in London. Though not to the extent of spending only £1 per day, you can get pretty affordable 'essential' range at your local supermarket if you're not into free range or organic labels. If I have to put a figure to it, a minimum of a fiver per day would be pretty safe.
However, if the kitchen isn't exactly one of your favourite place in the house, a decent meal in a decent restaurant will set you back around £15 without alcohol (head towards London Chow for some suggestions). Else the good o' fish and chips takeaway cost around £3. Add a quid more for a kebab at your friendly local kebab stall.
As the saying goes about only two things being certain in life, tax is certainly the more expensive. That's especially true in the UK. Even with a 50% income tax going to be slapped on those earning more than £150,000 per year in the UK, the tax rate is still cheaper as compared to Denmark (59% for top bracket) and Netherlands (52% for top bracket).
To see how much bread that you will actually be bringing back home, use this online calculator as a guideline.
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So there you go, the four main living expenses in London. For more, refer to Living & Working in London or Newcomer's Handbook for Moving and Living in London As always, if I miss out anything, do feel free to leave a comment or two.