Sunday, January 17, 2010

Cost of living in London - how much is enough?

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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.

1. Accomodation

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.

2. Transport

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.

3. Food

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.

4. Taxes

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.

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11 comments:

Lady Banana said...

Please tell me where you are getting fish n chips for just £3!?

It's a lot more expensive in this corner of London when you can even find a chippy that is!

C K said...

The chippy along Essex road near the local library offers a 'small' cod portion for 2.99! There's only one there so you can't miss it.

drcrab said...

I thought your estimates for the fish and chips were pretty modest - we can't get a fish and chips for less than £4.50! kebabs the same price too! (and this is outside London!)

I would add too, that grocery shopping would amount to say £50-70/week depending on whether one eats out frequently or not.

C K said...

Hey drcrab, agreed that groceries can be quite an expense. It also depends on whether you're into organic or you'll find with the 'essential' range - the price can be really different.

The fiver per person per day is around what I'm spending now. Do you get to cook often?

Anonymous said...

Expatriation is a very complicated affair as we want the best of both worlds, the opportunities to grow while maintaining our generally high standard lifestyle. Most good companies would provide COL and Quality of Live (if the host location is better - there is no allowances for QOL) allowances, some even provide mobility allowances. Most important of all, is the tax equalisation aspect because in SG you would pay very low tax while here the NI & Tax take up a huge chunk of my package. Companies generally use one of these mobility providers information (Mercer, AirInc, ORC or ECA). Good luck.

drcrab said...

hey CK
I cook practically every day! Well, breakfast is cereal/toast, lunch is at work, dinner is at home most weekday evenings. Weekends, we tend to eat out at lunch and occasionally at dinner. We don't have such a wide variety of cuisines to choose from (unlike you!!) :)

C K said...

@drcrab,
Ah, you must have a large repertoire in the kitchen then?

Any favorite dishes that you don't mind preparing every now and then?

Anonymous said...

Check this out! Quite interesting
http://www.ubs.com/1/e/wealthmanagement/wealth_management_research/prices_earnings.html

SL said...

Hi,

I have only JUST discovered your website. I live in Hertfordshire but have been working in London for about a year and a half.
Food at lunch time is pretty expensive (Pret, Eat et al). I miss the $3 fish ball mee at good old hawker centres and coffeeshops!!

C K said...

@SL,
$3? I had difficulty finding anything below $4 at Singapore's foodcourt when I was back earlier this year. That said, there are still some $2.50 offerings in some farflung hawker centres though. :)

Mike Richmond said...

A very colorful and fascinating open ceremony ...i think this is the best Olympics opener and might be the best Olympics in time to come.
prices of goods,especially food has gone up...