Cost of Living in the U.S. vs. the U.K: An Overview
No one would describe London as an inexpensive place to live, but it's a bargain compared to New York City. You would need an income of $6,215.20 per month to pay for a modest lifestyle in the capital of the U.K., compared to $8,200 per month for the equivalent lifestyle in New York, according to 2020 figures from Numbeo, a site devoted to cost-of-living data for destinations around the world.
The average cost of living in the U.K. compared to living in the U.S.
That figure includes an average rent of $2,263.20 for a one-bedroom in the center of London compared with an average of $3,352.79 in New York.
Of course, we are comparing diamonds to diamonds here. Both are notoriously expensive cities. If you moved, for example, from Raleigh, North Carolina, to London, your monthly rent would be an average 88.72% higher and dinner out would be 22.98% more than back home in Raleigh.
But in any case, there are some surprising differences in the cost of living between the U.S. and the U.K.
Cost of Living in the U.K.
An American moving to the U.K. is in for some surprises. For example:
- Gasoline costs the equivalent of $6.24 per gallon. The average nationwide price in the U.S. was hovering just below $3 per gallon in October 2020.
- Medical care is free through the National Health Service, and prescription medicine costs are heavily subsidized. About 10% of residents and some ex-pats buy private health insurance that enables them to skip long waiting times for some specialist appointments.
The impact of Brexit on consumer prices in the U.K. is the big unknown.
- Utility costs can be much more expensive. London costs for basic utilities are approximately 58% higher than in New York.
- Private school costs are much lower. Monthly fees for pre-school or kindergarten are 22.36% lower in London than in New York.
Cost of Living in the U.S.
New York City food prices generally are higher than those in London, whether you're dining out or shopping in a supermarket. But there's a big cautionary note here: The available price-lists for groceries in the U.K. are all pre-Brexit. According to the most recent data, the U.K. imported nearly 30 percent of its food from European Union countries. How much those imports will cost after the break is anybody's guess.
New York City has relatively bargain prices for transportation, by mass transit or taxi.
However, internet connectivity costs about 55% more in New York than in London.
- Overall, the cost of living in the U.K. is 12.21% lower than in the United States. Rent overall is about 25% lower in the U.K.
- You would need $6,215.20 per month to finance a modest lifestyle in London, compared to $8,200 for the equivalent lifestyle in New York City.
- Food is substantially cheaper in London than in New York, but that may change as the impact of Brexit kicks in.
Special Considerations on Cost of Living
When economists or statisticians measure the cost of living for a country or region, they look at the amount of money a consumer needs to reach an average lifestyle.
Put another way, the cost of living measures how much food, shelter, clothing, healthcare, education, fuel, and miscellaneous goods and services can be bought with one unit of currency.
By that broad measure, the cost of living in the U.K. is 12.21% lower than the cost of living in the United States. Rent overall is about 25% lower in the U.K.
Those are aggregate figures combining all metropolitan areas in Great Britain, from the pricey cities of London, Reading, and Aberdeen to the lowest-cost towns of Liverpool, Belfast, and Kingston.