Some things are more expensive in the UK and some things are cheaper and it sometimes just depends on how you look at it. If you factor in the exchange rate, then sometimes things will feel very expensive. The cost of living in the UK can vary significantly depending on where you live and your lifestyle. Here’s a breakdown of some of the main living costs to consider, updated for 2023.

Currency Exchange

The value of the pound is usually higher than the US dollar. Recently, the exchange rate in July 2023 was 80p to the USD dollar, or $1.30 per £1 £ Great British Pound (Sterling) More . So, products that cost roughly the same number of pounds as dollars in the US will be more expensive in the UK when you consider the exchange rate. For example, if a CD cost $13.99 in US, and costs IRO £13.99 in the UK, but if you consider the exchange rate, you’re actually paying over $18 for a CD here. Don’t forget that Value Added Tax is basically a sales tax, as of June 2023, the current rate is 20%. More is 20%. This is not always the case, and things have improved as British consumers are demanding to pay the same as other countries.

Petrol Prices in the UK

One area in which the UK costs are terrible is The UK word for gas(oline), probably short for petroleum. More (gas) prices. They’re currently near £1.43 per litre (July 2023). That’s near £5.25 per US gallon (3.78L), with exchange rate near $6.88 per gallon. These prices are largely due to taxes, as an incentive to ride public transportation (which can be more expensive anyway).

Fuel duty is currently levied at a British word for an apartment. More rate of 52.95p per litre for both petrol and diesel, while VAT at 20% is then charged on both the product price and the duty. ¹

Sales tax, known as Value Added Tax (VAT) was 17.5% until 2010 when it was lowered to 15% to boost the economy, but then it was increased to 20% in 2011, and has not changed. Home energy is only taxed at 5%, while most groceries and children’s clothes are 0%.

Typical UK Household Expenses

• Income Tax (seems around 20% average)
• Council Tax (around £120-180/month for an average family home, depending on property value, area, etc.) There are tax bands (A, B, C, etc) and you can search gov.uk by address, and then find the local council tax rate.
• TV License (£145/year for colour TV, £49 for black and white)
• National Insurance (taken with income tax from wages)
• Vehicle Road Tax/MOT(emissions and safety tests)/Insurance (Annual Road tax : £230 per year at post office or now by monthly direct debit, unless you have a big 4×4 and it’s then around twice that, annual MOT tests IRO £50 at test centres, Insurance (dependent on vehicle and driver but anywhere from £400 to £1500 per year for average cars)
• Housing/Utilities varies widely depending on location and size. If you search Google for “house prices in …” you will get results that will give you an idea. The lovely old stone homes, are drafty and expensive to keep warm, especially listed buildings with old windows that can’t be modernised.

VAT (20% sales tax on most shopping, figured into item prices)

The Savings Offset

• Free health care (compulsory insurance paid with high taxes, not including dental)
• Not needing a car if rail/bus services are convenient
• Company car (many employers supply these, if you’re lucky, but you will pay tax on this benefit)
• One less tax to pay, ie. not state AND federal as in the US
• More exotic In addition to a special day of the year, a holiday can also refer to a vacation or vacation time off work. More for less money, Greece, Paris, etc., flights to Europe are cheap.

Grocery Costs in the UK

The UK is currently experience high inflation, with 2023 prices up 19% from a year ago. ²

• Milk: 1.20 GBP per 2 liters
• Bread: 65-1.45 GBP per loaf
• Eggs: £1.90 per 1/2 dozen
• Gas/petrol: Petrol: £1.90 per liter, Diesel: £1.85 per liter
• Cigarettes: £10.50 for a pack of 20, give or take 50p depending on your brand of choice. Many smokers roll their own to save money, much cheaper, still a good time to quit
• Utilities, housing and family size dependent: Electricity: £100 per month, Gas: £75 per month, Water: £30 per month

The London School of Economics estimates that a single student needs £16,800 (2022 figures) to meet the basic expenses of living in London (excluding tuition fees).

LSE broadly estimates that students should allow £1,300-£1,400 per month for all living expenses, including accommodation, travel, food, laundry, study costs, and other personal expenses. ³

Average Salary in the UK

According the the Office for National Statistics (ONS), median annual pay for full-time employees was £33,000 for the tax year ending on 5 April 2022, up 5.7% on the previous year. In real terms (that is, adjusted for inflation) in April 2022, median pay for full-time employees fell by 2.6% on the year. ⁴

The ONS map shows weekly earnings by area. Typically larger cities will show higher earnings.

References

1. Tax as percentage of UK pump price. (n.d.). Retrieved from https://www.racfoundation.org/data/percentage-uk-pump-price-which-is-tax-page  

2. Bread to Bathroom, restroom or toilet. Also known as a WC, water closet. More roll: How UK prices compare to five European Union More countries. (2023). Retrieved 27 July 2023, from https://www.bbc.com/news/business-65833619

3. Science, L. (2023). London on a budget. Retrieved 27 July 2023, from https://www.lse.ac.uk/student-life/london-life/london-on-a-budget

 4. Employee earnings in the UK – Office for National Statistics. (2023). Retrieved 28 July 2023, from https://www.ons.gov.uk/employmentandlabourmarket/peopleinwork/earningsandworkinghours/bulletins/annualsurveyofhoursandearnings/2022