pelham123

I know there have been similar questions before, but here goes.. I'm American, and have a job offer in London that is 28,000 GBP. Job is in central london near Covent Garden. I am single and would ideally like nice (but do not need luxurious by any means) lodgings in a safe area fairly accessible to transportation and work. I am not adverse to sharing a flat for while but I guess would ideally (or eventually) like to live on my own. Would prefer not be isolated socially from the city. I'm not a huge spender but don't live on a shoestring either. I know London is famously and outrageously expensive, so my question is- is 28,000 salary enough to live on, or is it pushing the limits a bit? Is it necessary to share a flat on such a salary? Any thoughts from folks familiar with the London area would be greatly appreciated. Thanks in advance.

melr

Hi,

It very much depends on how much you spend. There are certainly plenty of people in London earning less than 28k / yr. Too give you an idea, 28k would probably translate into about 1,600 GBP per month after taxes. Not sure how London property rental prices compare to that, but I would guess that renting a flat by yourself would take a sizeable chunk out of that... I think flat sharing will be the way to go. And that, of course, gives you some social contacts.

Good luck.

papagena

IMHO it is enough to live on with a relatively extravagant lifestyle as long as you share a flat.

ira

Hi pelham,

Is that before or after taxes? Will you have to pay UK tax? You will be exempt from US Income tax.

Will you get a bonus at the end of the year? Many employers pay 52 weeks, not 12 months.

Paid vacations?

What benefits?

28000GBP translates to 28000USD, except that rents are rather high.

Hope it works out.

mikemo

Dear Ira,
I'll be happy to send you $5M USDs for 5M GBPs anytime.
M

nytraveler

Not sure where you are coming from - or what your salary is now - or what lifestye you are used to.

The tax issues are big ones. Also, does your employer supply private healthcare insurance - I don;t know if this is buyable at all by private individuals in the UK health care system - and you certainly wouldn't want to be stuck with a public system.

If you search above there have been a couple threads with info on this - that might give you more perspective.

pelham123

Thanks everybody! All interesting info.

Ira,
Yes, I will have to pay UK tax. As far as benefits, I am offered life insurance, pension plan, a paid month off a year plus national holidays,and a transport. Salary is for twelve months.

By saying 28000 GBP = 28000 USD do you mean the purchasing power is equivalent?

Thanks again.

Kate

Pelham, there was a thread on this subject recently where I outlined typical monthly living expenses on top of rent, so you can see how far your money will go.

melr's monthly take home figure gives you a good idea of what you'll have in the bank each month after tax (which will be deducted from your paypacket by your employer).

You will do MUCH better for accomodation if you share - bigger place for your money. Virtually everyone in London under the age of 35 shares until they move in with their partner. You'll be quite shocked by the prices.

I've got to dash to a meeting, but I'll come back with some suggestions about where to live, and how to find accomodation.

Regarding the comment about private health care - yes, you can take it if you want. Using someone like BUPA will cost about £50 a month upwards, depending on your medical history. However, the idea that you can't just rely on the public health system is ridiculous - the majority of the country does just that. You'll be using the public (NHS) system for all your standard GP visits and any emergency care anyway, and the NHS isn't nearly as bad as the press would have you believe.

flanneruk

You'll pay roughly £7400 tax, including social security payments, and that'll be deducted from your salary each month, leaving you about £1750. If you're flat sharing, property tax will almost always be part of the rent you're paying. There are no other local or state taxes to pay, and health insurance (throughout the EU) is covered by your tax. All prices in Britain are shown including sales tax.

Private health insurance is rarely worth the cost if you're strapped for cash (as you will be): it doesn't cover pre-existing conditions, and in almost every case requires you to make fullest use of the public system. It's useful only to speed up access to treatment for irritants (like replacement hips) or for preventive medicine, and to get you more comfortable circumstances once you're out of danger. If you're in a car accident or have a heart attack, you get exactly the same treatment, public or private. There has even been some publicity lately that in some conditions - like perinatal complications - the private sector has a significantly poorer record than the public one.

If you're foolish enough to have a prejudice against public medicine, remember we live longer than Americans.

There's a myth among American tourists that a dollar buys you as much in the US as a pound does here. Possibly true if you're comparing hotels in Peoria with hotels in London (and delude yourself that America doesn't have sales tax or the ever-outstretched hands of tip-begging waiters and the like), but utter nonsense if you're comparing the cost in London of health treatment, beer, theatre tickets, public transport, a pound of lamb or even a decent dim-sum lunch with its New York equivalent. I take it from your monicker that you're from New York.

Merchandise (like iPods) is often at a dollar-pound parity: but prices in real supermarkets for things you actually need have been about $1.50=£1 for some time. Renting or borrowing apartments in New York, I've found that - rents apart - daily life in New York is always slightly more expensive than in London, though merchandise shopping is cheaper.

Your problem is rent. Flat-sharing, you'll have little difficulty as long as you don't try to live too centrally (look at places in Z2 on the Piccadilly Line). Renting by yourself, you might have to go further out. Remember we're happy to pay quite high proportions of our income (40-50% of post-tax isn't unusual) on a mortgage, since that's really a form of compulsory saving scheme, with far better historical returns than the stock market has ever offered. So few people rent (except in the highly-inflated corporate market for banking head honchoes), and rents are high.

You'll probably get much better specific advice on renting and flat sharing on the Thorn Tree site (which isn't just where backpackers lurk) and on other aspects at the www.americanexpats.co.uk site (though it is heavily dominated by trailed partners, whose problems are typically not those of the trailer)

SiobhanP

You should be fine. We always tend to live on what we make. A friend of mine a few years ago moved for a year from NY to London. She got a flat share in a huge lovely 3 bed 2 bath near paddington in Bayswater. It's a good way to get a social circle as well. I don't know if loot (An ads apaer) is the way people go anymore. A lot of time its word of mouth as I was offered a place through friends wehn I thought about moving over 3 years ago. Don't live too far out in the sticks 9if you are on your own. That's just my personal feeling as you can keep yourself busy when getting yourself used to the move and hop into the city.

Go for it it's a new opportunity.

Cicerone

Having been an expat for 15 years I would definitely say go for it. However, if the above calculations are correct, you will have about US$36,000 after taxes to pay rent and otherwise live on each year. Think about whether, how and where you could do that in NYC, and add about 10-20% to the cost of daily living, and you have London costs, IMO. You will be stretched, but for a few years I am sure you can survive, and as you are single and hopefully young enough that you don’t need to start worrying about saving for retirement or a house, I am sure you will enjoy the experience.

I assume the health care coverage provided by your insurer is not private insurance, but you will be part of the National Health Service (NHS). If that is the case, you might look into getting travel insurance from a US insurer (assuming you are a US resident). This will cover major medical for you while outside the US. It is relatively cheap. This will keep you out of the NHS for major health problems, surgery, etc. You can continue to use NHS for regular check-ups, prescriptoins, etc. From what I know of the NHS (which is admittedly from doctors within the system), you would be better off using private care for things like surgery, and avoiding the queues, etc, involved in the NHS. I don’t believe the travel insurance company asks or has an exclusion for whether you are in fact working in that foreign country, but check the rules. The coverage is also generally good if you are in the US for periods of less than 30 days. Run a search on the internet for travel insurance, it has been about a decade since I had my last policy when I spent a year travelling in Asia between jobs.

As noted above, for US federal income tax purposes, there is an exclusion for about the first $80,000 in income each year, so you will be exempt from paying US federal income tax. However, you still have to file a return showing no tax due. This is important because if you eventually return to the US and start paying tax, Uncle Sam will wonder what happened during the years you were abroad if you have not filed in those years.

You should also look into whether any of the taxes you pay in the UK can be returned to you when you leave, particularly any social security fund or provident fund taxes you may have paid Some countries, like Singapore, allow you to take this with you when you leave as you won’t be there at retirement to get the benefits.

Ann41

My husband's salary several years ago was 28,000k and he took home 1,600 a month, but he was also paying extra tax on a company car, so flanneruk's estimate of 1,750 is probably pretty accurate.

It's likely that you will be paid monthly, rather than what most Americans are used to (every two weeks or twice a month).

I would only get BUPA if you have some sort of condition. Otherwise, you'll be fine on the NHS, assuming you're young and healthy.

Don't forget to file your US tax return while you're living abroad. The US and UK have a tax treaty so that expats from both countries avoid paying double income tax, so the tax you pay in the UK will be credited toward your US taxes (they cancel each other out for anything under US$80k a year, although I think that limit may have been raised recently).

28k GBP certainly does not translate to 28k USD.

billy_goat

You said something about transport. If your employer is paying for your season ticket, then that would be a great benefit.
You would only need private medical insurance for "cold" surgery and you are unlikely to need that.
Of course, the NHS is not perfect, but I and my family have always had excellent service. Don't forget that a private hospital is not going to have the equipment and staff that an NHS hospital will have if anything goes wrong.
An awful lot of adverse NHS publicity comes from our medics "shroud waving" in an attempt to get more funding.
On your side of the Pond, there are a lot of people who hate the idea of "socialised medicine" because they are making a very comfortable living from the present system.

ira

Hi Pelham,

>By saying 28000 GBP = 28000 USD do you mean the purchasing power is equivalent?

Yes. Your taxes, as noted above will be 25-30% of your gross - about equivalent to the US.

Housing will take a very large chunk out of your net - more than in the US.

For 2004, London was found to be 19% more expensive than NYC, up from about even in 2003, mainly due to housing.

See http://www.mercerhr.com/summary.jhtml?idContent=1095320

You say you will have transport - does that mean that they will give you a car for which you will have to pay upkeep, gas and parking?

Kate

Ira, when a London company includes 'transport' as part of the package, that would normally mean tube/train pass - if living in Zone 2, that equates to £82 a month. There's no point having a company car allowance in London - you have to pay additional income tax and congestion charge, and the company is unlikely to have parking in central London. No one really needs a car in London.

m_kingdom2

What you might not have considered:

Do you have unearned income? That will be taxed at up to 40 per cent. Your bank a/c will have a net rate (i.e. 20 per cent off of the gross) automatically calculated.

That salary is perfectly liveable if you've already purchased your own home, have modest tastes, and just have yourself to look after. However, what you must remember is that on that salary, you're not going to be staying in the pleasant parts of London. It will be an utterly different experience to the ones you've had before. Living costs will be around 1000GBP per month, leaving you very little left for rent, and simple things such as telephone bills.

If you could provide a more accurate breakdown of costs, then rentals can be recommended. As for safe areas, virtualy all areas are safe, most are just downright dumpy though.

Have you considered this? 28k isn't a shocking salary by any means for a couple who are both working, and have a 30 per cent mortgage. To be honest, I'd be looking (for a well located one-bed) to spend around 21k a year on renting, which is basically your salary (and more) gone!

You can't get anything for under 150 a week, and that's a small room - can you live like that?

ira

Thanks, Kate

pelham123

What valuable info! Thank you all - kate, flanneruk, ira, siobhanp, cicerone, billygoat, mkingdom2, ann41, et al, for your generosity in sharing your insights. Am presently in the process of making a decision on this and it has all been hugely helpful.

To clarify: I'm not in NY but rather in SF (despite the monicker) although SF is arguably as costly. I'm not that young any longer either (37), and definitely not independently wealthy. But the job itself (aside from living in London) is very dear to my heart, so I'll stew on it a bit longer. I have several other options and am considering those as well. The financial factor does, I have to admit, seem to be the kicker here.

And yes - the transport is an employer paid tube pass.

Cheers (and thanks again)

welltraveledbrit

Dear Pelham,
You'll find the lifestyle in London very different from SF. I"m from England and currently living in the East Bay...London is just so much more expensive in terms of things like eating out...but the museums are free and when the Travelux offer is on you can go to the National Theater for 10 pounds!

You just have to learn to live in a slightly different way. While certain things may be more expensive you may find that with a year in London you could take advantage of all the cheap airfares and see alot of Europe.

I agree with m_kingdom2 that desirability rather than safety is generally the issue when it comes to neighborhoods. Frankly I'm often surprised by the rundown look of even "good" neighborhoods in London!