Are you thinking of moving to beat the high cost of living in the UK? Before you do, it’s important to take a step back and look at the bigger picture. Another region of the country might pay a higher average wage but charge more for things like utilities, food, and petrol - leaving you worse off.
In this guide, we’ll look at:
- Which areas of the UK are cheapest to live in
- How to bring down your overall living costs
- Why living costs are never the same
Learn how to beat the high cost of living and take control of your financial situation (maybe without even having to move).
What is the cost of living index?
The cost of living index compares how much a person should expect to pay for essential products or services - like shelter, energy, food, education, and healthcare - depending on where they live in the world. It also tracks how these figures change over time, so that economic trends can be identified.
The cost of living index in a nutshell:
Shows how expensive it is to live in one geographic area compared to another.
- Can include costs relating to anything essential - including accommodation, childcare, food and much more.
- Shows how the cost of living rises or falls over a given period in different regions to give the bigger picture.
- Each country has its own unique system - meaning there is a specific cost of living in the UK index that economists will use to analyse and compare regional data.
What is the cost of living in the UK?
The same job role could pay a much higher or lower wage depending on which part of the UK you live in. And it’s not always the better-paid employee that comes up trumps - as other factors come into play that can render this wage gap null and void.
Earlier, we talked about the cost of living index, which compares how much people spend on things like transport, housing, and education. Once these expenses have been deducted, you’re left with your disposable income.
This means that a high wage earner’s pay packet could be used almost exclusively to pay rent, utility bills, and food costs - leaving them with little to spare each month.
Depending on where you live, you could find yourself struggling to make ends meet - or live a lavish lifestyle on the back of a substantial disposable income.
Top 10 cheapest places to live in the UK
If you’re thinking of moving somewhere cheaper, comparing the cost of living across multiple areas is advisable. The below table ranks geographical areas from high to low - and you could certainly use this data to inform your decision.
- Derby
- Belfast
- Newcastle
- Cardiff
- Liverpool
- Sheffield
- Southampton
- Birmingham
- Exeter
- Leicester
Remember: The cost of living might be lower in these areas but what will you earn? If your take-home pay is low, this will eat into the savings you made on things like groceries, rent, and energy bills.
That said, salaries in the UK have been rising since 2017 - so moving to an area that pays more isn’t the only option on the table. You might be better off relocating to a region that’s shown consistently strong year-on-year wage increases.
How to beat the cost of living - Five ways you can start saving
You can’t control the cost of living. The price of products and services will always be influenced by supply and demand - and, of course, where you live. But that doesn’t mean you can’t make lifestyle changes that’ll give your disposable income a much-needed boost.
- Don’t eat out - stay at home. If the cost of eating at a restaurant is high in your area, swap nights out for nights in. Buying supermarket own brands will help shore up your coffers - and, if you use your loyalty card, additional savings could be yours to enjoy.
- Cancel any unnecessary direct debits. Are you paying for things you don’t need? Gym memberships, recurring subscriptions, and insurance payments are just three examples of direct debits we tend to forget about (and these unused debits add up to an astonishing £14bn in the UK every year).
- Use comparison sites to get better deals. Instead of staying with the same utility supplier year-on-year, use a comparison service to find cheaper offers. Happy with your supplier and worried about changing? Then contact them and see if you can haggle them down to a lower price.
- Combine your debts onto a credit card with a low rate. Instead of paying variable interest rates across multiple cards, transfer them onto one card instead. Providers often lure new customers in with an introductory rate of 0%. As long as you pay off your balance within that initial period you could save money.
- Swap the car for public transport instead. Depending on where you live, this might not be possible. But, if you live in an area with good transport links, you might be able to save by leaving the car in the driveway and taking the train or bus instead.
What things cost the same everywhere?
Water is water, food is food, and electricity is electricity - no matter where you live. And so, applying this logic, the cost should be the same for these things wherever you live. But it isn’t.
Why is that? Let’s take broadband as an example. Rerouting fibre optic cables to a rural area will take longer than in a built-up environment like a town or city. Add into the mix the fact that less people live in the area and the broadband provider has to recover their costs somehow - which will come in the form of higher monthly tariffs.
The only way to beat the high cost of living is to move where wages are higher and products and services cheaper. Failing that, looking for ways to reduce your monthly overheads is the next best option.
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