London may win for iPhone earning power over Poland but cost of living much higher

It takes 100 hours longer to earn enough money to buy an iPhone in Poland as it does in the UK.

This insight into earning power by researchers at the financial services company UBS helps to demonstrate why overseas workers find London an attractive city to find a job.

But their findings also show that while the earning potential may be better, London is an expensive city with prices much higher than they are in the place many Londoners once called home.

UBS took 68,000 pieces of data from 71 cities around world to put together an index which looks at costs and the spending power of people working there.

London is ranked as the 5th most expensive city after New York, Zurich, Geneva and Oslo and 6th most expensive if rents are excluded. When it comes to take home pay, the amount we earn after tax, London trails in 11th in the list.

And UBS came up with some interesting measures of spending power. Using a new iPhone as a benchmark they examined how long the average worker would take to earn the cash to buy one. In New York it takes 3 working days. In London it’s 41 hours, in Warsaw 141, but the longest labour was in Kiev.

Iphone earnings

Across the globe it is much quicker to eat a Big Mac than to earn the money to buy one. In London it takes 12 minutes and in Warsaw twice that. In Nairobi it’s nearly 3 hours.

Big Mac earnings

Many can happily avoid the indulgence of a new smartphone or a burger and the real cost of living is measured in essentials such as food and housing.

UBS looked at a shopping basket of 39 common food items including bread, milk, meat, fish and vegetables. Many arriving in London to work will have realised that it is much more expensive to feed the family, unless you have moved from New York or Zurich. The average global price for the basket of goods was $400. Prices were highest in Zurich and lowest in Kiev. London was 8th most expensive of the 71 cities

 

USB has published the Price and Earnings Index every three year since 1971.

See also

London expensive? Not compared to being an expat in Luanda

What National Insurance really tells us about London’s overseas workforce

 

 

London expensive? Not compared to being an expat in Luanda

Money changing handsIf you are one of the thousands of people from overseas who has come to live and work in London the city can seem expensive, but count your blessings that you have not been posted to Luanda. The Angolan capital is the most expensive place in the world to live as an expatriate, according to an annual study carried out by the HR company Mercer. London comes in at 12th in its cost of living rankings for 207 cities.

The bad news for those settling in London is that the only place in Europe they could have chosen that is more expensive is Switzerland. Zurich, Geneva and Bern all come ahead of London in the rankings.

Mercer measures the cost of 200 goods and services that include housing, transport, food, clothing, household goods and entertainment. Prices are measured against a baseline set by New York and currency movements are measured against the US dollar.

The Angolan capital, Luanda, topped the list for the third year in a row. Mercer says that despite being a generally inexpensive city imported goods that expats would expect are pricey and finding secure living conditions comes at a high cost. It is 1 of 2 African cities in the top 10 that also includes 5 Asian cities and 3 in Europe – all of them Swiss.

Mercer Cost of Living Survey 2015
City Country Continent
1 Luanda Angola Africa
2 Hong Kong China Asia
3 Zurich Switzerland Europe
4 Singapore Singapore Asia
5 Geneva Switzerland Europe
6 Shanghai China Asia
7 Beijing China Asia
8 Seoul South Korea Asia
9 Bern Switzerland Europe
10 N’Djamena Chad Africa
11 Tokyo Japan Asia
12 London United Kingdom Europe

Mercer says that Switzerland proved so expensive due to the strength of the Swiss Franc against the Euro.

London held its position at 12th. The next most expensive European city after London was Oslo at 38 followed by Paris at 46.

Asian cities climbed the rankings. Mercer points out that the high placing of Hong Kong owes much to the fact that the Hong Kong dollar is pegged to the US dollar which drove up the cost of living locally.

The strengthening dollar made US cities more expensive for expats but the highest placed American city is New York at 16.

Source data

See also:

Poor sustainability and high cost public transport mar global cities win

London ranked as top global city destination