UK vs US salaries

[Star555]

Perhaps a naive question, but why are US salaries so significantly higher (often 2x) than UK salaries for the same jobs, e.g. in science and technology? I know that UK gets NHS and more holiday time and maternity leave than the US, but can that really make such a big salary difference? I also know that private (fee-paying) uni education is insanely expensive in US (state unis are much cheaper), but in UK the cost of fee-paying schools for children up to Year 13 isn't exactly cheap either!

For those of you who moved to/from the US by choice, was the increase/decrease in salary among your main incentives/concerns? Or did salary not play a big role for you? (Perhaps other factors like being near family were more important.)

Research health insurance costs op - eyewateringly expensive for half decent cover. Also zero paid maternity leave, parental leave and a very presenteeism working culture (rare that folk take their whole limited leave entitlement in many corporate roles)

You're comparing apples and oranges. Lots of reasons why salaries are higher for the same job in the US, but for those who aren't in work there really is little state support, minimal health care and for such a wealthy country it's an appalling divide between rich/in work and poor/unemployed.

The cost of living is so much higher so you don't end up any better off. Groceries and household items are more expensive, some things are eye wateringly expensive e.g. car insurance, home insurance, mobile phone contracts, tv, internet is all way more than in the UK. There's also out of pocket healthcare costs which can add up quickly if you have health issues.

As a general rule of thumb, the recommendation is to take a UK salary, double it and that's your US salary. So if you're earning say £75k, a US salary of $150k is going to give you a broadly equivalent lifestyle.

I think most people who are looking at making the move, do their research carefully and try and gauge the cost of living where they're planning on moving to but there are some costs that you never get used to.

@scotx this is an interesting rule of thumb! But is it applicable for London specifically (especially considering renting alone)? The rest of the UK certainly has lower cost of living than major US cities, but isn't London comparable to NYC or LA?

but isn't London comparable to NYC or LA?

Not in our experience. Everything is more expensive - food, healthcare, parking. Dh’s colleagues were on over twice his U.K. salary and had a comparable cost of living.

Most friends with kids were either paying private fees or living in an area with very high property taxes ($20k per year in one case) so their kids could go to a good school.

@SherryPalmer you mean NYC/LA is more expensive than London, right?

It really depends where you live when you factor in the cost of living. I moved from Phoenix AZ and was shocked at how low the wages in the UK were and how eye watering the cost of living and housing was (even in Wales..). My quality of life in Arizona was far superior to that in the UK. But if I'd been coming from NYC or San Francisco etc I think they'd be on par. So it really depends where you're coming from and going to.

Yes I personally do think that general rule of thumb applies for London - NYC. A high London salary would scale up to an equivalent high salary in NYC. A difficult move would be somewhere in the UK with a low COL (and salary) to NYC which would almost certainly need more than x2 and some strong negotiation skills. So if you're in London earning £200k, you're going to be just fine on $400k. But if you earn £50k in say Newcastle and your company want to transfer you to NYC, you're going to experience a significant decline in lifestyle living in NYC on $100k.

We moved from London to LA, LA is expensive but yes the salary matches and we are still much more comfortable than in the U.K. DH is genuinely worried about how we’ll get by on U.K. salaries but appreciate his perspective might be a little screwed. But even taking in coat of living into account we are much better off here (kids in public schools, excellent healthcare covered by his employer etc)

@scotx

Yes I personally do think that general rule of thumb applies for London - NYC. A high London salary would scale up to an equivalent high salary in NYC. A difficult move would be somewhere in the UK with a low COL (and salary) to NYC which would almost certainly need more than x2 and some strong negotiation skills. So if you're in London earning £200k, you're going to be just fine on $400k. But if you earn £50k in say Newcastle and your company want to transfer you to NYC, you're going to experience a significant decline in lifestyle living in NYC on $100k.

Agreed

We moved to Maine and our cost of living isn’t particularly high. Healthcare is the biggest cost but it’s a fixed amount per year and we set it aside out of pre-tax income.

Our local schools are excellent but our property tax is $8k a year so that is a fair whack. That's on a big house on an acre of land about 2 miles from the beach. The house itself cost about $400k. We happened to move when the pound was very strong - we got over $2 to the £1.

DD1 is at private university but gets a scholarship so it’s only a bit more expensive than UK university. DD2 is looking at her options - the two offers so far both include significant scholarships. We certainly wouldn’t pay full whack for any of our children to attend an expensive university when there are so many cheaper options and scholarships available.

I earnt $60k last year doing freelance and contract work. I’d probably have got half that in the UK.

We moved for the lifestyle, not the money, but the money has been a nice bonus.

Social security pensions are also much higher than in the UK so it makes sense to stay after retirement.

We haven't experienced a 'presenteeism' culture at any of our workplaces. We do work very hard but we take 5 weeks of holiday per year and get bank holidays and paid sick leave.

I also think it's hard to compare cost of living. We have 3 cars insured for anyone to drive, including 4 teens, and that costs about $1500 a year.

OTOH our heating costs at least $200 a month even with us cutting our own wood for the stove.

Internet is $90 a month for a 400mbps connection which also seems a lot.

Fish and veg are cheap. Meat - because I buy organic - is expensive.

School lunches are free and all students get a laptop provided - e-learning has been excellent at school and university.

DD1 hated her middle school so she went to a $9k a year boarding school for her last 4 years.

It seems to be swings and roundabouts.

My friend is not an 'exec', he earned about £25k in the UK & moved to Florida (for love!). He earns about $55k there and has a better quality of life than he did here, but not hugely better.

To answer your question, yes we moved here for the increase in my husband's salary..he's an engineer (mechanical) & unfortunately the salary in the UK was dreadful..we're at roughly 3 x an increase and can now exhale.

The sheer amount of British engineers we've met here in the Midwest alone begs to question what needs to be changed in the UK in order to retain that knowledge..it's sad really but it's a no brainer when it comes to paying bills and quality of life.

To put another perspective on it, in the U.K. we wouldn’t be able to afford transatlantic holidays every year, but living here we can afford to go home to the U.K. every summer (family of 4) and for me to take most of the summer off (I’m a freelancer) because I make enough in the meantime to make up for it, as does DH (who takes 3 weeks in the summer and several other weeks throughout the year as his company has an unlimited paid time off policy) - we wouldn’t have lived this far away if we weren’t able to do this but this of course means having an extra disposable income of £4-8K a year to make it happen

There simply isn't a single rule because there's too many variables both in the offer itself and in local cost of living.

Every offer needs to be computed on its own. For example: the cost of health cover. Part of this cost is paid by your employer; part is taken out of your salary pretax. It makes a massive difference in your total compensation if they pay 50% of the premium vs 80% or more. Then you have to look at the insurance itself to see how much more you're liable for (the deductible). When comparing job offers in the USA it can be better to take a slightly lower salary for a better benefit package.

Then there's taxes. Federal tax is one thing, but then there's state income tax (not all states have one). Some cities have an income tax, like NYC and Philadelphia. NYC is expensive partly because your taxes are very high. If you buy a house, rather than rent, you will have to pay property taxes, which again, vary quite a lot.

The cost of absolutely everything is locally variable from electricity to groceries to car insurance. Housing prices are dramatically different. One reason California is so expensive is that everything there costs more: high state taxes, high housing, even highest gas prices.

Presenteeism can be an issue but is most dominant in specific fields (finance and tech) and locations (NYC, SF Bay).

My hometown has some of the most expensive housing in California that comfortably compares to London (not SB, SF or LA). My dad thinks my UK salary is peanuts.

I am just when we go grocery shopping over there. A decent loaf of wholemeal bread costs how much? Or half gallon of milk. What did you say you pay for your phone package each month? How much does it cost to buy something online, and how long does it take to arrive? What did you pay for your son's braces? How much will your student loan cost when you're 60? $1000/month for your (very basic) health insurance, and your house costs 5x the salary of both of you adults working FT jobs? etc.

Childcare is cheaper, that's one aspect, at least.

My elderly parents despair of the debt burdens that young Americans have to take on to get a university degree. My folks both came from no-money backgrounds & say they never would have gone to college if they had to face those kinds of debts.

I know a lot of expats who say they’ll retire back to the U.K. because cost of living here (California) seems out of reach once you’re not working

DH was offered a fairly well paid job in Southern California last year. We turned it down because of the cost of living there.

Do people tend to own or rent? I think in some European countries, renting is more common place?

Owning is more popular in the country as a whole, and is actually somewhat subsidised by the federal government through the existence of the 30 year fixed-rate mortgage (which only exists because of government backing). New York City is the big exception with 2/3 of residents renting their home, though other large cities have a relatively higher proportion of renters.

Many suburban areas actively discourage the construction of multifamily housing through zoning laws, or restrict where it can be built.

I agree that home Internet is stupidly expensive with virtually no competition and mobile phone contracts are overpriced. Car insurance is variable and when you see the number of TV adverts you understand why they charge so much!

Quite a few Californians leave for retirement, because of the cost. New Yorkers too, though this is also because of weather.

I actually have no frame of reference any more for mobile phone contracts. Ours is about $200 a month, for which we get unlimited calls, texts and data for 5 lines (and maybe an Apple Watch?), including mobile hotspot and calls in/out of Canada and Mexico. We also got 2 iPhone 11s which we pay something ridiculous like $3 a month each as part of the contract. I have no idea what you'd pay elsewhere for that.

I'm just going to come at this from another angle - I work as a fundraiser in non-profits and my salary is FAR more than 2x what I'd make in the UK. Fundraising is a much more competitive and lucrative business in the US, so it's a whole different world with different salaries to match. There isn't the whole "people who work in charities should be paid a pittance" attitude that there is in the UK, it's seen as valuable work with benefits to match, although they are still lower than the private sector.

I don't think I could afford my NYC lifestyle in London, although, I've never lived in London so couldn't say for sure. I believe childcare is a bit cheaper in the UK? Food is cheaper, but I think a comparable apartment and transport costs would be much more expensive.

We moved to the US last year and the cost of living here is definitely higher...food is more expensive, housing where we are is v expensive, eating out is more expensive.. but my husband's salary has more than doubled and we are pretty comfortable in spite of the increased outgoings, we can afford a decent car and private school for my DC. Most people we know have a much better lifestyle than you could expect back in the UK. I think professionals here expect to get paid v well for what they do. But ! Health care costs are unpredictable and very high even with insurance.

I haven’t lived in the UK for ages so don’t even know anymore but when people from the US that I know move to the UK (usually London) they complain about how expensive it is and how much higher the cost of living is. And they are usually on big expat packages and keep their us salary!

We moved from the north of England to the Midwest ( but an expensive part). I think that a double salary is about right because the costs of food, utilities, cell phone etc is a lot higher.