A family moving to London from the US just inquired on our social network about UK salary comparisons. The husband has received a job offer, and he and his wife want to know if the salary figure will accommodate London’s cost of living for a family of three children.
This is an excellent question!
And I had no idea how to answer it! 🙂
So I turned to my hubby to see if he had two pence he could share on the topic, and this is what he had to share… It seems finding a source for directly comparing salaries within a given field at a given level may not be as straightforward as a Google search, but perhaps you could try. Otherwise, reports published on such could cost a few thousand dollars. (Ouch, really??). But says hubby:
“A big question will be their housing (whether their firm will cover or not), as that will probably dictate most of their cost of living. A fair gauge is to consider the COLA (cost of living adjustment – some websites have information on comparing this) between where they are currently in the US and London. Roughly, this probably means converting a US salary into GBP (so multiply that USD number by roughly 0.625), and then add an additional 40% COLA (could be less of a difference if they are currently in NY or SF). So, for example, a person currently making $250k would probably want to ensure their total comp is roughly £220k to safely match their lifestyle.”
Such an estimate based on current income doesn’t account for extraordinary circumstances, of course, that could come into play, like having to continue paying mortgage on a house back home or going from a dual-income household to a single-income one (at least temporarily) as a result of the relocation, and the like. Much depends on your individual situation that no cut-and-dry answer here could help with.
And as it is, there’s no cut-and-dry answer to be found here anyway. What I can suggest to you, though, as quickie online references if you’re trying to determine how much money you’d need to make to support yourself and/or a family in London are the following links as a start:
Cost of Living Comparison Between Two Countries at Numbeo.com – Offers a free comparison of COL between any countries you select from its down-drop menus. What it will spit back is a comprehensive chart comparing line items of standard living costs right down to what it costs for a liter of milk.
Cost of Living Calculator at Numbeo.com – Allows you to input your specific origination and destination countries, as well as monthly disposable income to determine your degree of purchasing power in another city/country. As an advanced option, you can opt to manually input cost estimates (such as meals and beverages) in your home city to obtain a more precise comparison.
International Cost of Living Calculator at SalaryExpert.com – Offers a similar function to the above, allegedly for free, but requires from the getgo that you manually input estimates for home city variables like rent, food, etc.
Cost of Living Allowance (COLA) Calculator at Xpatulator.com – For a price ($99), you can obtain a report on how much of an allowance you’ll require above and beyond your current salary to cover a higher cost of living. Other services available are the Salary Purchasing Power Parity (SPPP) Calculator and Cost of Living Index (COLI) Calculator.
You can also look into results of Mercer’s Cost of Living survey for last year as a rough idea of how an upcoming international relocation could bode: www.finfacts.ie/costofliving.
Speaking from an anecdotal perspective, if you’ll be earning a salary in GBP, the expense of day-to-day products and services in GBP is essentially relative—housing is going to be the real kicker if you’re unable to negotiate an expat package that obligates your employer to pay for such. In general, bear in mind that as London is one of the more expensive cities of the world to live in, it’s not enough to have procured a UK visa and London job. Be sure you’ll be able to compensate for a different cost of living (most certainly higher if you’re moving to London from the US—though, as stated above, not so different if you’re moving from New York or California) to make your London move feasible.