Cost of Living in the U.S. vs. the U.K.: What's the Difference?

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 $7,255 per month to pay for a modest lifestyle in the capital of the U.K., compared to $9,454 per month for the equivalent lifestyle in New York (assuming you rent in both cities), according to the latest figures from Numbeo, a site devoted to cost-of-living data for destinations around the world.

That figure includes an average rent of $2,612 for a one-bedroom in the center of London compared with an average of $3,725 in the center of 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 for a one-bedroom apartment in the city center would be an average 39.9% higher and dinner out in an inexpensive restaurant would be 11.8% 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.

Gasoline, Medical Care, Utililies, and Education

An American moving to the U.K. is in for some surprises. For example:

• Gasoline costs the equivalent of $6.9 per gallon as of June 2023. The average nationwide price in the U.S. is $3.6 per gallon as of June 2023.
• 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
• Utility costs can be much more expensive. London costs for basic utilities are approximately 44% higher than in New York.
• Private school costs are much lower. Monthly fees for pre-school or kindergarten are 73% lower in London than in New York.

Food and Transportation

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% 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 90% more in New York than in London.

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 21% lower than the cost of living in the United States. Rent overall is about 32.8% lower in the U.K.

Those are aggregate figures combining all metropolitan areas in Great Britain, from the pricey city of London, and other higher cost places like Reading, and Aberdeen to the lowest-cost towns of Liverpool, Belfast, and Kingston.

The Bottom Line

The cost of living in the United States compared to the United Kingdom varies from city to city, with New York and London being the most expensive cities respectively.

Consumer prices including rent in the U.K. are 21% lower than in the U.S. Rent prices in the U.K. are 32.8% lower, and groceries are 29.8% lower. However, public transportation, gas, basic utilities, and childcare are more expensive in the U.K. Buying a house is also is also more expensive, with a square foot costing about 28% more in the U.K. than in the U.S.