Cost of Living in London

[from_india]

Hi All,

I have got an offer of ~48K GBP. I will be based in London. I will be staying in London with my wife and a child (2 years old). Per my calculations, my cost of living in London (not in central London) is 1700 GBP per month (total 20K GBP per year). Is this an accurate estimate of the cost of living in London?

Currntly I am in India, and I need to take decision whether to relocate to UK or not. I would highly appreciate any advice/opinion/comment regarding the cost of living. Thanks!

PS: My calculation of the cost of living is further detailed as follows (Note: the figures are monthly figures); please let me know if i am missing anything or should I change my figures:
House Rent: 1000
Food: 200
Transportation: 100
Intertainment: 25
Internet/Cell phone: 200
Medical Insurance: 80
Other expense for my kid: 50

[first2last4]

Internet/Cell phone: 200 -> Take this as £20
Medical Insurance: 80 -> £35 should be enough.

I think £1500 is a good mark.

[from_india]

Wow, doesn't that sound cool!
200 saved is 200 earned!!
Thanks first2last4!!!

[manindergill]

hi from_india,

I got your PM as well.

So in reposne of that, If your offer is £ 38K , it is too less for London. If it is £ 46 K or £ 48K , then only you should come. So, get the things cleared with your employer on what is this £ 8K component.

Just get a feeling of how much you will get in hand on £38K and £ 46K/£48K from this URL :- http://netsalary.blogspot.com

Your house expenses for 2 Bedroom Furnished House :- Around £800 GBP+. (Don't go for Unfurnished homes).
You have not included the Electricity , Gas and Water expenses:-
electricy :- £40 p.m
water and sewerage :- £ 25 p.m.
Gas :- £ 35 p.m.
Sky / cable TV subscription :- £15-£18 p.m
Broadband Subscription :- £ 15 p.m. (Tiscali , Unlimited 2.3 Mbps)
LandLine Charges :- £ 12 p.m.

No need for Medical insurance if your company is providing it, also NHS is free of cost.

Rest of your estimation is correct. I don't know how much luxury you want with buying a CAR as you have a KID of 2 years. With a high salary, you may be enjoying the luxury of a Esteem/ Wagon-R VXI in India , As was the case with me, . Although commutation in London is good, you may not require it and must not buy it till you get FLR. As getting a DL is very costly here.

My conclusion is, London is not a place to come at £38K, if you have £46K/£48K, then please come and enjoy. Make sure what this £8K is which you have mentioned.

[from_india]

Hi Maninder,

Thanks for your detailed reply!

The flexible fund 8K, that they provide, is in the form of retail-shop coupons, childcare coupons, petrol coupons, pension, etc., which I can choose as per my needs. This is to save the tax on these items. In short, I will surely get 8K; and this 8K would be non-taxable. The remaining of my salary, i.e. 38K is taxable. Hence the total amount I get in hand after tax is £35,046.

If I consider 1500 per month expense, a trip to home per year (~1K), other yearly expenses like cloths, visiting places (~1K) makes 20K expense per year. That leaves me with 15K GBP (~12Lack INR) in savings; something that I can leave my current job for.

Does my estimation sound accurate? Any other advice/comment/suggestion?

By the way, how much a driving license costs? I would need a car for business purpose. The company provides the car, but I dont understand the rules and conditions yet. So, I will either go for company car or buy an old one for around 1500. Sounds OK? Can I get a OK car for 1500?

Again, thanks for your help!


PS: Mention of 48K as my salary in my first message was a typo. My apologies!! My actual salary is 46K.

[manindergill]

Things look ok for you,

Initially put less amount in pension as one gets it after the age of 55, although one can get even if one is not in UK but try putting the least in pension, zero if possible , take other things as petrol and other coupons etc.

Rest looks good for you. You can get a good 2nd car in £1500. For first year you can drive on Indian Licence.

I have posted the DL costs in some thread in HSMP category. Once you come here, you will come to know.

Cheers and welcome to UK.

[Jk2007]

While calculating the savings, take into account the Tax you need to pay on 38K.

However, I feel GBP 48K gross is still a good salary.

[tvt]

Of the items you mentioned, only childcare coupons and pension contributions can be effectively tax free. if you earn more than £8,500 p.a, petrol coupons / retail vouchers are fully subject to UK income tax (40% in your case) and national insurance (in your case 12.8% for your employer). You only save 1% national insurance for higher rate payers because benefits in kind are not subject to employee contributions. If you or your employer don't declare these allowances/ coupons you and your employer can be in deep trouble (it's a criminal offence not a mere civil matter).

BTW, you should add around £1,200 for council tax and £130 for TV licence (all p.a.). Also the amount you mentioned for food is too small unless you buy only raw materials and cook everything at home. You should also add at least one month rent you give as a deposit to your landlord. Though this deposit is refundable at the end of the tenancy it affects your cashflow.