There is no doubt that the average cost of living in London is one of the highest in the world. Before moving from the US to London, I did a great deal of research on monthly expenses here. Knowing what to budget for was helpful, especially when looking for an apartment in London that didn’t cost 70% of our salaries!
Cost of living in London
Now that we’ve lived in London for the past year, I can share my insight on the monthly costs (and a few yearly ones, too). Before we proceed, here are a few things to keep in mind:
- There will be no two people with the same living expenses in London. In the winter, if you keep your flat toasty warm and work from home, your gas and electricity bills will be higher than those of your neighbor who wears layers to stay warm.
- Rental costs make up a significant portion of your monthly income. After calculating the cost of your other monthly expenses, plan your housing budget.
- As a result of the UK leaving the EU, we see rising prices in rent, groceries, and other imported goods. Increase in food prices following Brexit. Only time will tell how things will pan out post-Brexit.
- Shared housing/flats require dividing the utility costs accordingly.
- Following that, you can expect in terms of monthly expenses in London.
Average cost of living in London per month
Based on my own experience and data from Number and Expertise, the average monthly cost of living in London for a single person in 2022 will be £864 excluding rent. With that said, the recent shift to remote working and the loss of financial sector jobs due to Brexit have been driving down prices. Rents have decreased by another 5% in many Zone 1 and Zone 2 London neighborhoods in 2022, so you might find a great deal!
Rent is one expense that varies so widely that it doesn’t make sense to include it in this calculation. Let’s discuss it further below. When you move to London with a partner, you won’t simply double that £864 to get your monthly spend. What’s the point? As a result, some costs won’t change at all (for example, internet), and others will increase by 30-40% (for instance, gas).
Cost of renters insurance in London
You will be required to take out renter’s insurance as part of your tenancy agreement with most landlords in London. We were required to show proof of our insurance within 30 days of moving into our apartment. Renter’s insurance covers the value of your possessions, so you don’t have to pay to insure the property itself. The cost is quite affordable because of this.
An insurance policy for rental property will cost approximately £10/month. You will have to determine the exact amount based on how valuable your stuff is and whether or not you have special items insured, such as jewelry. If your insurance company offers an annual payment plan rather than monthly, you should research it. Paying for the whole year in one lump sum is often cheaper.
Cost of Gas and Electricity in London
The same company in London typically provides gas and electricity. If your place doesn’t have a modern meter that bills by exact usage, you’ll either have to submit meter readings every few months or pay a fixed price. Submitting regular readings allows the energy company to calculate how much you should pay based on your usage. Keeping track of your spending will keep you from paying too much and having money sitting in your account or paying too little and getting an adjustment bill.
A fixed price is determined by taking the average energy cost over the calendar year and dividing it by 12. The previous tenants’ energy usage would be incorporated into the calculation if you moved into your new place. You can expect to pay around £60/month for energy for a one-bedroom flat. The exact amount depends on various factors, such as whether you live in a basement or a top-floor apartment, if you have double-glazed windows, and how much cooking you do at home. However, if you’re a new resident and need to sign up for a gas/electric contract, you’ll pay a historically high rate.
Cost of Groceries in London
The amount you spend on food depends heavily on your tastes and habits in London. It’s much more expensive to shop at the farmer’s market for organic produce every week than to shop at Lidl for everything. In addition, if you don’t like to cook (or your apartment doesn’t have much of a kitchen), you might spend most of your food budget on dining out than on groceries.
Cost of other expenses in London
Lastly, but certainly not least, there are “other expenses.” My list includes pet supplies, dry cleaning, clothes shopping, gifts, and dental cleanings. Consider your current spending in these various areas when planning your London budget. Most of this stuff was reasonably priced when you come from the US. However, clothing in the UK is about 20% more expensive than in the US. Remember that if you like to buy new clothes throughout the year!
In London, do people tip?
Except when utilizing cabs or public transportation, where a smaller gratuity is commonly acceptable, Londoner’s tip is between 10-15% most of the time. Although tipping for tour guides is optional, it is the customer’s responsibility to make the decision. Some restaurants automatically include a tip in your bill.
Interesting facts about Living in London
- London is one of the largest cities in Europe and the world, with a population of over 8 million people.
- London is a culturally diverse city, with over 300 languages spoken by its residents.
- London has a rich history, with landmarks such as the Tower of London, Buckingham Palace, and the British Museum that attract millions of visitors every year.
- The London Underground, also known as the “Tube,” is one of the oldest and busiest metro systems in the world, with over 400 stations and 11 lines.
- London is a leading financial center, with the London Stock Exchange being one of the largest stock exchanges in the world.
- London is known for its vibrant food scene, with cuisines from around the world and a wide range of food markets, such as Borough Market and Brick Lane Market.
- London is a green city, with numerous parks and gardens, including Hyde Park, Regent’s Park, and Greenwich Park.
FAQs (Frequently Asked Questions)
- How much money do you need to live comfortably in London?
For one person to lead a comfortable life in London, a salary of at least 40K would be required.
- Would you be able to live comfortably on 25K?
It depends on where in the UK you live. Londoners probably would not be able to do so. I live in the southwest of England and can comfortably live alone on £25,000 per year. It would be like living like a king in North Wales or Northern England!
- Does living in London make sense?
Anything over 70K in London is excellent, especially if you live on your own! The average person can live a decent life on a salary of 40K, but with 70K, you can add a few luxuries to your life. However, some jobs pay 90K, 120K, and even 200K, but finding them is challenging.