KimikoPi

I am planning a one-day post-cruise stay in London and am pained by the exchange rate. It's nearly double the dollar. So how do the non-wealthy natives of London get by in such an expensive city? Are the salaries higher on average than American salaries to account for the cost of living? How do the poor Londonners amuse themselves?

anchoress

Not sure quite what you mean? The dollar is very weak just now. Against euros and also of course against sterling.
Some employers do give a "London allowance" though.
Most do have TV!!

degas

Pubs

GSteed

Thousands of Poles (and other new EU citizens)have moved to London. They are living on very little. They share rooms, do their own cooking and entertain each other. And they are saving money or sending it home. Tourists don't use the bus system. They stay in 'nice' hotels and eat out. London workers live outside the city and tube in. Chances are that they are also brown bagging it. Try a bingo parlor to see one way that locals keep busy.

flanneruk

Why do you think the dollar exchange rate affects us?

A declining dolar merely means some foreign countries are cheaper to take holidays in, and reduces the impact on us of higher world commodity prices. Since oil and foreign holidays are fairly essential to our way of life, a weak dollar generaly makes us richer.

I'd be intrigued what essential costs of daily life the poster thinks are so expensive for us.

fnn

London is expensive but everything is relative when your paid in pounds. When I lived there I didn't make a lot of money but was always able to get by and amused myself by going to the theatre and even taking weekend breaks to Italy.

nona1

You can't look at exchange rates between currencies to give you any idea of cost of living. If you go to other countries the exchange rate will mean that you get loads of currency for your dollar, but that doesn't mean that everyone there is hard up!

suze

The comparison you are making doesn't make sense. You are focusing only on the exchange rate from USD, which is you are living and earning in London does not apply.

Even as a tourist, when you get out and spend your GBP it is not like things cost twice as much, necessarily, then they would in the US. That is false logic.

LESLIEMOMOF6

Just curious, but does anyone know the price of a liter of gas in London these days?
Leslie

Micheline

We stay at our daughter's in London for a month every year and I am shocked at the cost of living. Sure museums are free but you can't spend all your time in museums. I think the average salaries are higher but I still don't know how the blue collared workers get by. No wonder they take advantage of cheap flights like Ryan Air. Housing, eating out even in pubs, transportation, movies, clothing, all cost much more. It is a wonderful city and we consider ourselves so fortunate to be able to stay there but we do find it very expensive.

PatrickLondon

There was a thread about this a few weeks ago which gave lots of answers, but I think the only effective way to look at this is to work out how long you have to work to pay for different things.

Taking my hourly rate of pay (which is around the national average), in a month the "time equivalent" of my main bills is (roughly speaking):

- 32 hours 20 minutes for income tax and National Insurance
- 6 hours 6 minutes for Council Tax
- 2 hours 54 minutes for electricity
- 1 hour 27 minutes for water supply
- 7 hrs 13 minutes for my monthly Travelcard
- 3 hours 38 minutes for telephone, internet and TV licence
- 11 hours 36 minutes for food at the supermarket
- 8 hours 43 minutes for other credit card bills
- 7 hours 51 minutes for canteen lunches at work
- 21 hours 48 minutes for other cash spending.

Averaging out last year's travel expenditure over 12 months, I'd have worked in any one month for 8 hours 43 minutes to cover my trips to Montreal and Barcelona (I did house swaps). I went to the theatre four times last year at about 3 hours 3 minutes a time; not many "big" meals out, but they'd have cost about the same.

The big gap here is housing. My mortgage is paid off, but where I live there's a pretty steep service charge (averaging out at 17 hours 27 minutes a month). I couldn't afford to rent the flat I'm living in or to take out the kind of mortgage someone on my salary would need to buy it (at least 85 hours a month). Which is why a lot of young people are in cramped flatshares or still at home.

The other big gap, of course, is that we don't live in hotels or have a lot of concentrated "tourist" expenditure in restaurants, bars and attractions.

PalenQ

<I'd be intrigued what essential costs of daily life the poster thinks are so expensive for us>

everything i buy is about twice as expensive as in the U.S. - this is mainly food in supermarkets, coffees, pubs, newspapers -

the universal exclaim of Americans returning from London is how really expensive everything there is. McDonalds prices are a good index - across the board at least twice as high.

Kristinelaine

Another consideration is where in the USA you live. I live in a small Michigan town and when I visit my daughter in Chicago, I find prices there VERY expensive in comparison.

I believe that if I visited someone in LA or San Francisco, I might find prices even more expensive. So the part of the USA that you are comparing to London is important.

I think I won't go to London from my small Michigan town! Just kidding, but I imagine it would be quite a shock. We were there about seven years ago and it was expensive (to us) even then.

nytraveler

They're not paid in dollars - they're paid in pounds - so the exchange rate doesn't affect their cost of living.

Also - renting an apartment and cooking your own food is much less expensive than stying in a hotel and eating every meal out.

And no - salaries in London are consideraley lower (in buying power) than similar jobs in NYC (although probaly a lot higher than those in many other areas of the US - just like those in NYC.)

janisj

This post is similar to ones about such and such city on the continent being so much cheaper to visit than London or Edinburgh because the € / $ exchange rate at $1.34 is so much better than the £ / $ rate at $1.97. Simply faulty reasoning.

As the others say, exchange rates have next to nothing to to w/ the cost of living (except for holidays abroad and some imported goods)

j_999_9

While the OP's premise appears to be wrong, the general question is still valid: Is the cost of living in London a great deal higher than in a comparable city in the US? If so, does that make the standard of living lower?
The "hours worked" is a pretty good measure. In other words, for instance, how many hours does an average Londoner have to work to pay for a week's worth of groceries?
As an aside and just hearsay, a British friend if mine who's now living and working in the US says he can afford much more in the US than in England on a comparable salary. He cites cars, clothes, food, fuel as the main examples. However, I can't say that's true.

DDA

I think that KimikoPi was asking if the average pay in the USA is say, $30,000, is the average in the UK 30,000 pounds? I have wondered the same thing. When we visit the UK, just about everything costs double what it would at home. Are their salaries double ours?

bob_brown

The situation will not reverse itself until the US quits borrowing over $1 billion a day just to enjoy life.

One of these days the gravy train will run out of steam. Until that happens, the dollar will be a very weak currency.

I got a first class taste of just how valueless a US dollar is these days.

I was on an EasyJet flight to London Gatwick. Everything such as coffee, cokes, apple juice and water on an EJ flight is sold. On this flight the acceptable currencies were Swiss francs, pounds sterling, and euros.

I had none of the above. My US dollars were rejected flatly, sneered at even.

The first year I went to Europe after the euro had gone into circulation, I could buy one for 89¢ US. Today, that same euro costs me $1.34. That is a swing against me of more than 50%. Throw in a little euro zone inflation and the same hotel room costs me about 55% more than it did a few years ago.
In other words if I paid the equal of $100 then, it is the equal of $155 now.

With the US slipping in foreign trade value, I don't see our weak dollar reversing course anytime soon. If anything, it will go weaker.

That $8 trillion debt of our at some point has got to start to pinch because the interet we pay on it will be taking money away from more productive uses.

Interest is part of debt, and we are shelling out quite a bit of it right now. It essentially buys us nothing useful except the ability to incur more debt.


Anybody know the algorithm for borrowing your way out of debt??

PalenQ

All statistics i've seen indicate Londoners are paid on an average less than Americans and when we see such expensive store prices we wonder how can they cope

Then you look at how they have free nationalized health care and a whole lot more benefits (and taxes) and it throws this all off.

Hard to compare i think and the fluctuating exchange rates make it harder.

walkinaround

-bob, your dollars were sneered at because you had a rude stewardess. your dollars were not accepted because this was an internal european flight (correct me if i'm wrong). your conclusions from this incident defy logic...however convenient they are to the point you are desperately trying to make.

-yes, salaries on the whole are lower in london than in other places like new york or boston. this is in buying power.

-the 'hours worked' measure is a decent measure but it doesn't account for societal differences. for example, many britons work for their house. life is geared towards paying off the mortgage. people often slow way down around the time the mortgage is being paid off (this will probably change). in the US there is much more saving for university. only very recently has university caused people significant expense in the UK. in the US, it's a lifetime expense that people save for...not really so here yet. people in the UK are just starting to save more towards retirement. up until recently, retirement was not thought of very much due to gov't pensions and company final salary schemes. there are many other societal difference in how people spend and think about money. the uk is changing but older people still have their ideas about money.

-yes, the OP's logic is flawed. however, who can blame him/her? even our own publications here in the UK publish cost of living comparisons that use the US$ as the base currency. the cities with strong currencies now have been getting more expensive and cities in weak currency countries have been getting cheaper. new yorkers might be surprised to see that new york is getting cheaper. no, it's just getting cheaper relative to cities in countries with strong currencies but it's not getting cheaper for residents any more than london is getting more expensive for residents. (well in fact it is but not as much as the surveys suggest).

-massive credit card debt is one way that far too many londoners 'get by'.