The cost of living in London is disproportionately high when compared to the UK cost of living, and despite having lived in this city for more than ten years, I had never paused to make a detailed analysis of the London cost of living.
Recently we have been living on a single salary for a few months, so I started a careful analysis of all monthly expenses in London and organized them to also help those who decide to move, even temporarily to London, and want to understand how much does it cost to live in London.
In this guide you will find a realistic overview based on a lifestyle of people who like to enjoy London but still need to keep budgeting in mind. In the breakdown of expenses I will highlight when you can save money if you compromise.
Living cheap in London is possible, but requires effort, adjustment, and a shift in mental attitude. If, after visiting this incredible city, you are planning to live in London for a short period of time it will be easier to compromise than if you are a family that wants to settle for a few years. The most important thing is to be aware of how much you can stretch your money to take the right decisions.
At the end you will find some specific info about London salaries: it isn’t easy to find a clear picture, the government website (that is usually really reliable) shows figures only up to 2018, when the median average salary in London was £28,800. (There are other sources online that will give you figures, but they are usually based on smaller samples that I don’t feel so keen to trust).
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AVERAGE COST OF LIVING IN LONDON
Speaking of London, it is challenging to talk about averages. The extremes often coexist side by side and personal decisions can greatly affect the cost of living in London. Many factors influence the different costs. As we look at the average cost of living in London you will find details to understand how that average could apply to your circumstances.
London is divided into 9 zones. Zones 1-2 are the most central and most expensive. In this guide, prices will take into account zones 1-3 to give you a tangible idea of costs without continually ending up in the average.
How expensive is London?
This breakdown of expenses is based on my personal experience having lived in London both as a couple and as a family. For an accurate analysis of the cost of living in London as a single I did a detailed analysis with many work colleagues who live alone. In summary:
- The cost of living in London for a single person living alone is in proportion higher than for a couple, as the fixed expenses like TV licence or internet subscription do not reduce.
- The cost of living in London for a couple, where both partners are working, is probably the situation from which you will get the most out of your salary.
- The cost of living in London for a family of 4 (with young children) is mainly impacted from the expenses coming from the need of a bigger house, and the cost of childcare (only private for under 3s)
Before exploring the details you can see below a summary of the expenses.
|LIVING COST |
|Single||Couple||Family of 4|
|£1,602 – £1,682||£2,361 – £2,441||£2,971 – £3091|
|Mobile Phone bill||£10||£10||£10|
|TOTAL AVERAGE||£1,967 – £2087||£3006 – £3,166||£3,776 – £3,976|
HOW MUCH MONEY DO YOU NEED TO LIVE IN LONDON?As you may have noticed, if you compare the numbers on this list with some calculators available online you will notice that the totals are higher. Obviously it all depends on the lifestyle you want to have, these numbers are not based on a luxurious life, but not on a student life either.
Around £1,650 for a single, £2,400 for a couple, and £3,030 for a family are realistic numbers for the minimum expenses you will need to face. Then you can keep adding based on your needs and desires.
HOUSING COSTS IN LONDON
Let’s start with the expense that weighs most of all: the cost of accommodation in London. Renting a house in London will be the expense that takes the biggest chunk of your salary. Everyone who starts looking for a house in London for the first time is shocked by the prices and/or the state in which the properties are shown.
Despite everything, if you can take a philosophical view, it can also be an interesting dive into the local culture. Many foreigners will also find it interesting that real estate agencies have no qualms about showing prices even when completely out of reach for ordinary people. In other countries, for example, beyond a certain price the agency will simply put the message “confidential negotiation”. In London you will find in the estate agents windows pictures of houses to rent from £200/300 per week up to £15,000 also per week!
The high cost is the main reason why many workers, even with decent salaries, still find themselves sharing an apartment. Unfortunately, a studio flat costs, in proportion, a lot more than a 2 bedroom flat. Many factors influence the accommodation cost in London:
- The condition of the apartment: if you never tried to rent a flat in London before then you could be shocked at what you will see. Flats that haven’t been renovated for 50 years. Flats with dirty carpets, beige walls, rusted bath tubs, heating boilers in the bedroom, bedrooms with no other space than for a bed, rooms with no windows… and so on.
- The distance from the tube: the closer you are to a tube station the more you will pay. 15 minutes walking will already help to keep the price a bit lower.
- The services available in the area: areas that are well connected and offer easy access to big supermarkets, shops, and entertainment will of course drive the price up.
How much does a flat cost in london?
So how much does a flat in London cost? If you are very adaptable you could find a mini studio flat in zone 1-2 for under £1,000 per month… but you will have to manage your expectations! If you want to live in an area like Maida Vale, West Hampstead, Bermondsey, or the trendy east then you better budget for at least £1,200 per month.
A couple in the same areas could be lucky and manage a decent 1 bedroom flat for around £1,600 per month, and a family with 2 small kids could probably look around £2,000. The councils south of the river are usually a little cheaper.
BE AWARE: in the UK there is no body that regulates the size of the houses, when you search online and find a 2 bedroom flat for £1,400 per month, check if there is an indication of the square footage. The flat could easily just be 40sqm … and 40sqm for a family are just not enough. Don’t be surprised to find 15sqm studio flat renting for £1.000! Incidentally you can estimate 1sqm as roughly 10square feet for a quick comparison.
UTILITIES BILLS IN LONDON
On rare occasions the rent also includes the consumption of water, gas, and electricity, or even council tax, but this happens mainly for studio flats or a new style of renting accommodation that has recently started from Quintain living for example. However, these are expenses that everyone expects when considering the cost of life in London. The one expense a foreigner arriving in London is often not prepared for is usually the council tax … or at least I was not.
The council tax can add even more than £200 per month on top of all other expenses. We’ll see more detail below on how much are bills in London.
Utility bills in London of course are also heavily effected by the way you use the house. If you are mainly working from home and your flat is not well insulated, then in winter you will probably end up spending much more in heating than what is in the chart.
Gas and Energy
Gas and energy are usually provided by the same provider, but not necessarily. The costs for gas and electricity are the responsibility of the tenants, but (unless your contract indicates otherwise) you can change them at will (London count several provider).
Some people change very often to take advantage of the incentives offered at the time of the switch (discounts, vouchers, free months, lower costs…), you can register with Look After My Bills to be promptly notified of the various offers to try to lower your cost of living in London.
With many providers you can pay a flat rate each month based on your estimated annual usage, so you will probably pay more than you use in the Summer, but less than you use in the Winter. This approach is really helpful to keep your London living cost more under control, but check your balance regularly as you don’t want a surprise bill if you’ve used more than was estimated.
Two or three years ago we switched to Octopus, a provider that works exactly this way. They use renewable energy and have the most competitive price at the moment. If you are looking for a new provider you can use this link and get £50!
In general for gas and electricity:
- A single person should consider spending around £50 per month in a studio flat studio.
- A couple between £55-70 in a 1 bedroom flat.
- and a family can estimate around £ 80-90 in a 2 bedroom flat.
Thames Water is the main water supplier in London. The differences in this case are less demarcated,
- a single person in a studio flat usually pays around £20 a month
- the average bills for 1 bed flat for a couple will be £20-25
- and a family in a 2 bedroom flat will spend around £30
Many houses are not equipped with meters so the calculation they make is based on parameters set by the Council and cannot be changed, regardless of the consumption that is made.
Council tax is a tax that is paid for each type of home. Be careful, you can’t escape even if you decide to live on a boat or a caravan! The councils classify each accommodation in one of the 8 bands. Each band has a different value, with considerable variations between different councils.
Westminster, in zone 1, is incredibly the council that has the lowest council tax in the city. I’ve been living in Hampstead for 11 years, If I move a 15 minute walk from my home, I would save more than £1,000 a year in Council tax! So many times I thought about it!
The council tax guarantees neighbourhood services such as schools, elderly care, garbage collection, street care and more. In this case too it is difficult to talk about averages because each home is classified differently.
To give an example: I live in a 2 bedroom rented flat in Hampstead. The apartment is in a Victorian detached house converted into 7 similar apartments. In the same building there is one apartment classified under Band E (council tax is £1,984.21 per year), one apartment classified under Band G (£2,705.75 per year) and the other five (including mine) are under Band F (£2,344.99 per year). You understand that when I discovered how much I had to pay for the council tax it was not a happy day! My bad, I didn’t research it properly!
There are a few exceptions where a reduction can be requested, such as in the case of people living alone (you will get 25% discount). For a decent flat in zone 1-3 approximately this is what you will pay:
- a single could pay around £60-90 a month for a studio
- a couple around £130-150 a month for 1 bedroom flat
- and a family around £180-210 for 2 bedroom flat
Other bills to include in a budget for living in London: Internet, TV licence
Electricity, gas, and council tax are expenses which cannot be avoided, here are some other things to include in your London expenses per month.
- TV LICENSE: Another fixed expense that you have to consider is the TV licence. Even if you don’t own a physical TV but watch it on a computer, you will have to pay. For 2021 you will need to pay £159. Here too, unfortunately, there is no exemption apart from not watching TV, not long after I moved I received a visit from a control officer … fortunately I had paid!
- BROADBAND: Internet is the other expense it seems you can no longer do without even though it is optional. Fortunately, there are contracts that start at as little as £20 a month. The more speed you want the more you pay, the longer you commit the less you pay. We have a contract with Vodafone for high speed Broadband giving 80 mbps+ and pay £19.55 per month. You can use this link to sign up too and you will receive a £25 Amazon Gift Card.
- EXTRA: Obviously, once we have finished talking about fixed expenses, we need to list those variables related to personal preferences. Fans of TV series, Netflix or Amazon prime, you will add at least £6 per month
PRICES IN LONDON FOR FOOD
Before the pandemic it would have been difficult for me to make a detailed analysis of food expenses in London. We weren’t properly organised, we did the shopping according to needs, mainly we bought lunch at the work canteen, we often went out for lunch or dinner on weekends, and about two or three times a month we ordered take away. The only constants were Liam and Santiago’s meals.
Now, we shop online once a week, based on a detailed meal plan in order to know exactly what to order for each meal, and we usually eat out only once a week (or never during the lockdown). This has made it really easy have a good overview of food prices in London.
Grocery prices in London
Obviously, it must be said that personal preferences and where the shopping is done will affect the final cost. Average price of food in London can easily be compared between some of the large supermarket chains.
Waitrose, Sainsburys and Tesco spread in a capillary way throughout the city. Wherever you live you will have one close by. Marks & Spencers, a British institution, is also very popular, but you will have to adapt mainly to its own brand. Then there are many others like Morrison and Asda including the beloved low cost ones, Lidl and Aldi.
The ease of access to the first group of supermarkets is paid for in terms of cost. If you only have access to their smaller stores then your average cost of food in London will be even higher.
Here is a good overview:
- a single has to budget around £30-40 a week
- a couple £60-70
- and a family around £90-110.
For convenience, household items such as toilet paper and cleaning products, are also included in these figures. What I haven’t included is what you could spend in more specialised shops like vegan or organic… and don’t underestimate the Bakery, in some London bakeries you could easily spend £5 for a loaf of bread!
Eating out: cost of a meal in London
Continuing to talk about food, let’s consider how much eating out will impact your monthly cost of living in London. Of course, this cost can easily disappear if you have to contain your budget. In London, and in the UK in general, it is not unusual to meet with friends just to have a drink at the pub instead of for dinner.
However it is also true that London is a real foodie destination, with some mouthwatering restaurants reflecting almost all the cuisines of the world. The variety is also evident in the prices. In London you can spend £5 for a great wrap / sandwich / combo meal at one of the kiosks in Camden town, up to £200 and much more at various Michelin starred restaurants.
Without considering the extremes we set the following as an average meal cost in London:
- a dinner in a gastro pub with a beer will cost you around £25 – 30.
- If you choose a restaurant you should get away with £ 35-45.
- For an informal lunch in a café you can eat your fill for £ 12-15
A single person that likes to eat out a couple of days a week should consider to budget £200-300 per month. Families with young children are in luck as most restaurants offer children’s menus with fixed prices usually between £5 – 8.
Even those who have to stay on a budget will find opportunity to visit exclusive places without breaking the bank. For lunch, many starred restaurants offer a set menu which often starts at £25. If you can contain yourself with drinks then lunch can be the strategy to try restaurants that are otherwise much less accessible.
HOT TIP: if you are up for an early dinner you can also try to book through First table, at same London restaurants you get 50% off the food bill.
COST OF TRAVEL IN LONDON
The average cost for transportation per month for most people will be driven by public transport, but we will analyse also how owning a car could impact your London budget.
Public transport cost
Public transport is very effective and widespread, but it is another element of the cost of living in London that weighs heavily if used every day.
The ideal would be to live not too far from your workplace so that you can walk, cycle, or use the buses (much cheaper than the tube).
If you are sure you will use the metro at least 5 days a week and your travels are exclusively in zone 1-2, then the most convenient thing is to load on your oyster card a monthly travelcard that costs £138.70. If you leave zone 2 you can pay for that particular journey as pay as you go. Some employers offer an interest free loan to purchase an annual travel card which is even better value.
If your job is a mix of working from home and in the office, or you decide to move alternatively on foot, by bicycle, or by public transport then my suggestion is to top up your oyster card or pay with any contactless debit / credit card for a couple of weeks and evaluate what suits you best. There are daily and weekly caps so even using a contactless card you will never spend more than the equivalent travelcard.
HOT TIP: families will be happy to know that kids travel for free on public transport until they are at least 15 years old. Buses are also really easy to use with the pram and last but not least, even with an in-line double stroller you can slip into a black cab without having to get the children out!
MY EXPERIENCE: Personally, for a long time I went to work by bicycle doing 10 miles a day (return), for two or three years I used a normal bicycle and then more recently I bought an electric bicycle. London has added many cycle paths and if you avoid the main roads you can cycle quite safely.
I can assure you that cycling in London is absolutely feasible, I am not a sports fanatic, I have always used the bicycle dressed normally even with comfy heels. Check if your employer offers the “Cycle to Work Scheme” to save a lot on buying a new bicycle.
HOT TIP: public transport is usual enough also for great short break. With a short ride on the tube you can reach Old Amersham and feel light years away from London, even if you are just round the corner. With train and bike you can even organise an awesome weekend on the beach in Kent!
Owning a car
Do you need a car in London? Obviously a car is useful, but generally not essential. Apparently less than 4 people out of 10 own a car in London.
OUR EXPERIENCE: when Mark moved to London he had a car and we used it for two or three years until the car broke down just as we were arriving at the airport to leave for a week end away (there’s a story!)… as it was too old we decided to scrap it and we never bought another one. Liam and Santiago were about 8 months old.
We have not had a car for 4 years now and apart from a few rare occasions we do not miss it. Considering the savings by not paying for insurance, parking, MOT, etc, when we go out and maybe it’s late we don’t feel guilty about taking an Uber.
When we need it, we rent a car either through Turo or for occasional weekends away in the UK by renting through one of the major car rental available around London. You can also consider car sharing like Zipcar and Enterprise Car Club .
If you decide to own a car don’t forget to consider that apart from the cost of fuel, insurance, maintenance etc, you need to add the high parking costs and congestion charge.
Perhaps unexpectedly, parking can usually be found easily, the real problem with parking is the cost! Do you want to go shopping in Marylebone by car? Get ready to pay £5.10 per hour. Appointment for a drink in trendy Shoreditch, £5.80 per hour. Ok, here I have brought some extreme examples, in many areas of the city centre parking is free in designated areas after 6pm, but try to familiarise yourself with the system or the fines (inevitable) will be high. You will probably also need to buy a parking permit for your own street.
Is it difficult to drive in London?If you speak to an English person who lives outside London they will try in every way to dissuade you from driving in London, calling it a dangerous city. However, I can tell you that in Rome I never had the courage to drive (and I took my driving licence there of course), while I had no problem starting in London.
OTHER COSTS OF LIVING IN LONDON
So far we have talked about all those expenses that you almost cannot do without, now you have to consider everything else, what gives you joy in life and for which you will have to keep part of your budget.
In London there is a great variety of Gym offers, from small independent studios to large and luxurious gyms. Fantastic council leisure centres also offer an excellent range of courses and equipment at an affordable price.
A Leisure Centre like the ones managed by Better will cost you around £55 per month with Inclusive access to the gym, fitness classes, and swimming.
Some of these centres are also a great resource for families as they offer 2 hours of free creche.
Based on your location, another gym to consider is PureGym with many locations in the capital. A search in your neighbourhood could still lead you to save money, consider that in many smaller gyms you can also use the pay as you go formula, thus paying only when you participate in a fitness session or use the gym, a few quick calculations will show the best option for you
Cinema and Theatre costs
Even if you have never been interested in going to the theatre before arriving in London, with nearly 40 theatres available to choose from at some point there will surely be shows that will grab your attention.
Luckily, tickets start quite affordably around £20. Obviously the better the seat position the higher the cost, but there are also many last minute offers around. Families are more disadvantaged in this case as the prices for children’s shows cost almost as much as a normal show.
Cinemas in London are generally more expensive than the rest of England, usually around £12. However, there are many ways to save. Almost all cinemas offer one day a week or some hourly tickets with reduced cost. Cinemas in less central areas usually offer more competitive prices, and in multiplex cinemas you can sometimes find screenings of films from the past season at very low prices.
HOT TIP: Don’t miss to visit one of the Everyman cinema, where you can sit on a sofa and eat and drink while watching a movie!
Average phone bill
Here you are in luck, your average phone bill per month can be as low as £10. That’s exactly what I pay for a sim only contract with unlimited call and texts plus 8gb of internet with Three UK. If you are planning to switch with Three check the link below and you will get reward!
The competition is really hard and keep prices really low. Different if you decide to buy a new phone, latest model will bring your monthly bill much closer to £50 (depending of the model).
Museums and Exhibitions
Most museums offer free admission (however they appreciate a small donation). The variety, quality, and quantity of museums and many other free non touristy things are sufficient to fill many days at the end of the month when the budget begins to tighten.
However, the museums of London continually host special performances and exhibitions of incredible quality and interest. Tickets costs are usually high, around £20-25, but are almost always ££ well spent.
Personal care: hairdresser and beauty treatments.
I know these expenses don’t interest everybody, but they help to complete the picture. Speaking of hairdressers, as with other specializations here too you will find side by side salons where a cut costs £12 or £350.
For example: Mark spends £15 in a basic but clean barbershop, while it took me a long time and many changes to find an hairdresser who knew how to colour red hair well! In recent years I have used the HOB chain where I spend £55-60 for colour only. For the cut, the price is similar. These prices obviously do not include treatments or blow-dries.
As for a beauty salon you will find one on every corner, some appear quite old and uninviting, but basic services like waxing and manicure I must say are performed to an acceptable level everywhere. To give you an idea, you can find full leg waxing for around £30, a simple manicure costs around £15, if done with shellac £25. Often on Treatwell you can find discounts at particular times.
HOT TIP: This post doesn’t include any expenses for travelling because it is really impossible to generalise, but if living in London in one side can’t be defined cheap London, one great advantage is that you can travel from here really easily and often really inexpensively. Venice, Dubrovnik, Malta, Turin, Madeira, Santorini, and many more, all have direct flight connecting to London. Most of the time you can fly there for less than £50 return!!!! Some budget airlines now stretch even as far as Egypt and Istanbul!
Childcare is the biggest challenge for a family with small children living without a support network in London. There are no public nurseries in the UK. Apart from a very small exception of people who could rely on 15 hours of childcare paid by the government since kids are 2 years old, the public nursery only begins at the age of three.
In many cases one parent will leave their job because what they would have spent on childcare would have been more than their salary.
From the age of three, if the parents both work full time, the children can attend the nursery for at least 30 hours a week for free.
Obviously, families with an enough income can rely on the care of a full-time nanny (yes like Mary Poppins) or private nursery, others navigate flexible working hours, childminders, occasional babysitters and a chunk of guilt.
To get an idea of the costs:
- A registered babysitter costs between £10 – £15 per hour
- A childminder between £750 – £1,000 per month
- A private nursery between £1,000 – £1,300 per month
- Some families rely on au pairs, although it would be not recommended for children under the age of two.
OUR EXPERIENCE: We have twin boys and have no family in London who can help us. Now that Liam and Santiago are almost 5 years old everything is much easier, but the beginning was very hard. Fortunately, I had a job that gave me a lot of flexibility: I could work at unusual hours and work longer hours on some days and short on others. Mark also worked in shifts and on weekends to always have one day off during the week, and for two and a half days a week we had a nanny.
I believe London is one of the cities in the world with the largest gap between the minimum and maximum wages received. In the UK all companies have to pay at least the Government set national minimum wage which is reviewed annually. Many companies in London pay the London living wage which guarantees a salary of £22,000 per year (full time 39h a week), around £1,550 per month. This is a voluntary wage benchmark set by a charity organisation called the Living Wage Foundation.
Looking at the 2018 government data, the average salary in London is around £28,800. This is the average between workers who are paid at the national minimum wage and city workers whose average income in London is around £150,000.
We could talk for hours about good salary in London versus good salary in the UK, but an important thing to note is that in London, unlike many other cities, growth can be very rapid. Depending on your skills you start with a salary, but you can grow and receive promotions quickly which also guarantees a salary increase.
HOT TIP: on the government website you can use their useful calculator to estimate your monthly net salary starting from your annual gross.
I hope this article has helped you to understand the financial picture of life in London, pop a comment below if you have any questions or considerations.
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