Saturday, January 8, 2011

The Cost of Living in London

Warning: if you don't want to think about how expensive London is or you don't care to know how I'm dealing with being a grown-up, don't read this post.

Obviously I've been struggling a bit with what this blog is and why I write it, but one of the things I know for sure - and am proud of - is that this is a resource for current and future expats.  Because of that, and even though I know that Nana will disapprove of this, I'm going to share some of my finances with you so that you - you who might be contemplating a move to London in the near future or are already here and are trying to figure all of this out - might gain some insight into what it's like to live in London from a financial perspective.

RENT: £390/month
Luckily, my rent is extremely low, in part because I'm one of four people in a three-bed flat.  Three things to keep in mind when renting in London: south of the river is cheaper than north, flat-sharing is cheaper than living on your own, and up-and-coming neighborhoods are cheaper than trendy ones.  I check all of these boxes, and therefore am not bled dry by my rent payments.

COUNCIL TAX: £37.50/month
Council tax is essentially a property tax used to fund social services in the borough in which you live.  Things to keep in mind about council tax: if you live in a house/flat inhabited only by students, you don't have to pay - but if there's even one non-student in the house, pay you must!  Also, it's important to note when flat-hunting that council tax varies by borough.  Wandsworth, where I live, has the cheapest council tax in all of England.

Friends with cars argue that driving through London is cheaper than taking public transportation, even with the congestion charge that was added recently.  I'm tempted to agree with them.  Public transportation costs vary based on which kind of travelcard you use (I have an Oyster, which I would recommend to anyone living in London) and in which zones you travel (I generally stay within zones 1 and 2 - basically, central London).  It's really a necessary cost of living in a city, but one that makes me grit my teeth every time I pay it!

Our next gas/electricity bill will be much higher per person per month as this figure is based on what we've been paying August-December and therefore doesn't include the serious months of oh-my-God-it's-so-cold-and-we-need-the-heat-on-all-the-time gas usage.

INTERNET: £10/month
I had nothing to do with setting up the internet in our flat, so I can't tell you anything about what the options are or why we chose whatever it is that we use!  Sorry.

WATER: £10/month

TV LICENSE: £36.10/year
If you watch or record TV programs as they're being shown on TV, you must, by law, be covered by a TV license, no matter what device you're using.  For more information, click here.

MOBILE: £30/month
As I mentioned before, my Blackberry came free with a £30/month contract.  Actually, this month's bill came to £39, but that's because I called internationally more than usual.  (What, it was Christmas - I wanted to speak to my family!)

Except for the snafu with my face, I love the NHS.  Thank you, socialism.


Other expenses - food, drink, entertainment, etc. - will vary based on your desired lifestyle, so I won't post them here as we all have different priorities.

Please keep in mind that all of these costs are just what I personally pay; depending on where you are or what your standard of living is, your costs will change.  Also, please don't take this as struck in stone!  This is just meant as a guide to what sort of costs you might come across while living in London.  I hope it's useful!

(If you have any questions, please leave me a comment - and if you live here and have insights, please do the same!  I'd love to start a dialogue about this.)

Shameless plug: my friend Adam runs an amazing website about investing - check it out if you want to spend and save more wisely!


  1. Nice post, Betsy. A few builds that may lessen the fear...
    - If you are not a student, but live with one, you are eligible for a 25% reduction in your council tax. It will take you a few weeks of wrangling with your council, but it's worth it.
    - I was just moaning about Oyster yesterday... it really is getting expensive. I walk to work, a true pleasure, but that means that everyplace I go on the weekend I weep a little inside when I see my Oyster total decrease with every touch-in. It's really best to do the calculation of when you can afford/need a monthly travel card (which = unlimited travel) or whether you can get by with pay-as-you-go (which is what I have and actually is less expensive). It's all a trade off.
    - is pretty much the gold standard for saving cash - can you renegotiate your cell phone for cheaper? Can you get cheaper gas/elec? Martin will tell you! We just upgraded our iPhone contracts so we pay £15/mo. Bargain.
    - Check out Top-Up-Discount for calling home. It's slightly annoying because you have to call an access number first and then dial the US number but essential you then pay 1p per minute of your call. That means 1 hr of your parents = less than £1!

    Overall though Betsy you're much savvier than I was 1 yr in! xx

  2. London is expensive.

    When you are applying to universities, you get a higher student loan if you accept a place at a London uni because of the discrepancy in prive between the city and the rest of the UK.

  3. @Danielle - I AM SO MAD THAT OYSTER CHARGES JUST WENT UP. I didn't realize until I was at the tube station and was asked for more than usual - argh! But since I travel to and from work every day (and usually travel more than that via the tube) I need an oyster, and the monthly seems to make the most sense for me. You're right, though, everyone should sit down with their diary for the week and a calculator! (And savvy has nothing to do with it - it's all trial and error! But thank you.)

    @Serafina - I had no idea! But I do know that there's something called a "London allowance" when you apply to jobs here to counteract the higher cost of living... same thing, I guess?

  4. @Betsy

    Yeah, that sounds pretty much the same idea!

    I can't remember the exact figures - it's been a few years since I applied, but wiki tells me that the maintenance loan in 09/10 was set at:

    £2,763 for students living at home
    £4,998 for students living in London and
    £3,564 for students living away elsewhere in the UK.

  5. Thank you so much for this post. can you share the expenses for food, drink and entertainment also? i know that depend on oneself, but i just want to know the range expense for food there. i need this to calculate my monthly expense if i lived there. (i'll moved to london in couple months ahead)
    thank u so much for the help..

  6. Thanks Betsy for the shout-out! Much appreciated.

    I loved this post because it de-mystifies cost of living in the capital.

    I actually thought London was even MORE expensive than this so appreciated this insight.

    Keep rockin'

  7. good post. Really helped and you know one think very smart as i am future traveler to UK and your post will definitely help me.

  8. Thank you betsy, That post was really helpful.
    What about food & entertainment costs?
    Does 300-500£ sounds realistic if I eat at home most of the time & go out only on weekends.

  9. Hello, Ron - I'm assuming you mean £300-500 per month, which can be done, though I expect you'll find yourself closer to the top of that range in terms of expenditures. It totally depends on your lifestyle though.

  10. Thanks a bunch for the blog! I'm actually moving from DC to London in a couple of weeks. I've been stressing about the costs and this post really helped me get a better idea. Am really glad I found your blog. I think I can/will be able to relate to much of your postings.

    I had a quick question maybe you could help with? I have yet to find a place to stay right when I get to London. Would you suggest staying at a hostel til I find permanent housing? How long would it take (I know it depends on preference but roughly) for me to find housing?

    Thanks again for the blog! Looking forward to reading your adventures!

  11. Hello, Anonymous, and welcome! If you have any questions please don't hesitate to email me - this move can be overwhelming but I promise it can be done! You've inspired me, actually, and I'm going to do tomorrow's post on Where To Stay In London. Come back to check it out!

  12. Hello:) I'm going to have one-month course at a language school in London. I would be very thankful, if you could please tell wether about £900-1000 is enough for moderate expenses on food, exursions and so on without rent? Thanks.

    1. Vollmond - yes, definitely! Just make good choices about where and how to spend your money and, if you can, try to identify your priorities before you arrive so you can budget appropriately.


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