Cost of Living in London

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London is notoriously expensive to live in – the city was ranked 8th out of 226 cities analysed in the Mercer Cost of Living Survey for 2024.

The UK capital is a city full of opportunities, but you need to fully understand the cost of living in relation to your salary to ensure you budget accordingly.

Transport, although efficient, can be rather costly. Lifestyle, entertainment, and shopping, however, can be tailored to accommodate various tastes and budgets, and there are plenty of ways for you to save money in these areas.

Cost of accommodation in London

Most expats living in London tend to rent property rather than purchase. The cost of rentals can be eye-watering, especially in the more sought-after areas and suburbs. Space is limited in the suburbs close to the city centre, though fortunately, London’s public transport network is excellent, making commuting accessible and considerably widening your accommodation prospects.

Larger properties with gardens are more readily available on the city’s outskirts, and the further away from the city centre you search, the more affordable housing becomes.

When looking for accommodation in London, you should also budget for utilities, such as electricity, gas, and water, along with council tax, as these tend to be excluded from the quoted rental price. Moreover, you must account for a five-week rent security deposit as part of your initial costs.

Cost of transport in London

London has an extensive transport network. Public transport includes the Tube, buses, trams and taxis. But getting around can also become expensive, especially if you live in outlying suburbs. The best option for regular commuting is to buy a monthly or annual travel card.

There’s little need to purchase a car in London, but if you wish to drive, you should factor in the high parking costs, especially in central areas. Additionally, if you drive into central London, you will be subject to paying a congestion fee. Other costs to consider include your car’s service, insurance, and maintenance costs.

Cost of groceries in London

The cost of groceries in London largely depends on your dietary preferences and where you shop. London is home to a fair few discount supermarkets such as Lidl, Aldi, and Asda, where you can get the essentials at cheaper prices than at shops such as Marks & Spencer and Waitrose. Ultimately, you can save money on groceries by planning your meals, buying in bulk, and partaking in coupon systems to get further discounts.

Cost of entertainment and eating out in London

London plays host to excellent entertainment offerings. From world-class theatres and music venues to museums and art galleries, there is truly something to suit all tastes. If you want to try out the most exclusive establishments in the city, you can expect to pay a small fortune for the privilege, but if you’re on a tighter budget, you will also be catered for.

Plenty of places offer special deals and last-minute offers where you can attend some of the best events at a fraction of the usual prices. When it comes to eating out, London has countless options, from fine dining at Michelin-starred restaurants to hearty street food.

Cost of education in London

You can send your children to a state school at no cost. There are plenty of exceptional state schools but standards vary, so thoroughly researching the various options is essential. Nonetheless, it is definitely an option worth exploring, especially if you’re planning to settle in the UK.

If you wish for your children to continue following the curriculum of your home country, you will find that London is home to the largest selection of international schools in the UK. Note, though, that fees at British private schools and international schools can be exorbitant, and these institutions tend to be oversubscribed due to the excellent standard of education they offer. Wherever possible, you should attempt to negotiate an allowance for school fees into your employment package.

Cost of healthcare in London

Although the UK’s public health system does suffer staff shortages and long waiting times, as a resident, you can use the National Health Service (NHS) to access good quality healthcare in London. Depending on the type of visa you hold and the length of your stay in London, you may have to pay a surcharge to access the NHS. If you do not have access to the NHS or would like to forego the long waiting times, you can also access private healthcare at a cost.

Without health insurance, this can be quite pricey, so it’s essential that you purchase health insurance in London. The cost of health insurance will depend on various personal circumstances, such as health status and lifestyle habits, as well as the level of coverage.