The Cost of Living in London

Close up view of a one pound coin on top of a ten pound note.

Photo © Stephen Mcnally/123rf.

The cost of living in the United Kingdom is generally quite high, often because of the amount of tax and duty charged on many items. On top of this, prices in London are around 25 percent higher than the rest of the country… perhaps more. Certainly if you are coming from a small town in the Midwest, you may be shocked by the high prices in London—but then a spell in New York City would be equally jaw dropping. Just how much money you will need in London will depend on your tastes and requirements. It will pretty much depend on where you live and how you live.

Although Britain is a big island, it is nevertheless an island and it has to import a lot of its food and goods.

According to the latest findings of an international cost of living comparison for London by Xpatulator, the British capital is now the 14th most expensive place to live as an expat, but it has been much higher in the recent past. The data used by Xpatulator to work out the cost of living compares prices in each city for the same quantity and quality of goods and services, which are representative of an expat’s lifestyle, using New York as the base. The data collected includes items such as accommodations and utilities, food and fuel, as well as health care and transportation. More importantly, this data may form the basis of any cost of living adjustment provided by your employer in your relocation package. It is important to remember that these comparisons convert prices to dollars, so the level of the exchange rate is important. London is thought to be a bit more affordable now because the pound is slightly weaker than it was a few years ago, but this may well change.

So, why is this island so expensive? Taxes and duties tend to be higher here, but there is also another factor at play. Although Britain is a big island, it is nevertheless an island and it has to import a lot of its food and goods. As you would expect, this tends to push the prices up—just ask any Hawaiian. It seems to me that as it is an island, UK businesses often charge as much as they can get away with. I am forever flabbergasted that I can buy four peaches in France (around 100 miles/160 kilometers away) for less than €1, whereas four peaches here in London will set me back around £3—and I’m talking about the prices in the summer when peaches are in season. The difference is that the peaches here have to be ferried or flown in. So keep this fact in the back of your mind if you are shocked by the prices sometimes charged here.


Excerpted from the First Edition of Moon Living Abroad in London.

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