What Does the Cost of Living Include?
When comparing costs between the United States and the United Kingdom, consumers focus on housing, food, and utility expenses. Since the U.S. is forty times larger than the U.K., costs depend on where individuals and families reside.
In 2024, rent prices in London are 29.5% lower than in New York City, but overall purchasing power in London is 24.2% lower than in New York.
Comparing Costs in the U.S. vs. the U.K.
- In 2024, groceries prices in the United Kingdom are 26.4% lower than in the United States.
- As of Jan. 2024, gasoline costs in the U.K. for the equivalent of one U.S. gallon is 8.18 USD compared to the nationwide average in the U.S. per gallon cost of 3.45 USD.
- Medical care is provided through the National Health Service, and prescription medicine costs are heavily subsidized. About 10% of residents and some ex-pats buy private health insurance that enables them to skip long waiting times for some specialist appointments.
- Utility costs in the United Kingdom for utilities are approximately 50% higher than in the United States.
- Internet in the U.K. is 47% cheaper for residents than for those in the U.S.
- Monthly private preschool or kindergarten costs are 23% lower in London than in New York.
How Economists Measure the Cost of Living
When economists or statisticians measure a country’s or region’s cost of living, they look at the amount of money a consumer needs to reach an average lifestyle. The cost of living measures how much food, shelter, clothing, healthcare, education, fuel, and miscellaneous goods and services can be bought with one currency unit.
In 2023 global prices rose by 7.4% on average. The most expensive cities include Zurich, Singapore, New York City, and Geneva.
What’s the Most Expensive Neighborhood to Live in London?
Knightsbridge and Chelsea were the most expensive areas to live in London in 2023.
What’s the Most Expensive Neighborhood to Live in New York City?
In 2023, the most expensive areas to live in New York City included Noho, Hudson Yards, Tribeca, Central Park South, and Nolita.
What’s the Average Price per Square Foot in the U.S.?
The median listing price per square foot for housing sales in the United States is $221 as of Nov. 2023, according to data from the Federal Reserve Bank of St. Louis.
The Bottom Line
The cost of living in the United States, compared to the United Kingdom, varies from city to city, with New York and London the most expensive cities. Economists measure a country’s cost of living based on the money a consumer needs for food, shelter, clothing, healthcare, education, fuel, and miscellaneous goods and services.
