BUSINESS

Fact checked by Amanda Jackson
Reviewed by Andy Smith

When comparing costs between the United States and the United Kingdom, consumers focus on housing, food, and utility expenses. Overall, the cost of living is 15.5% lower in the U.K. than it is in the U.S. However, local purchasing power is higher in the U.S., by 18.5%.

However, the U.S. is forty times larger than the U.K. Costs largely depend on where individuals and families live. Note: all data in this article is as of 2025.

Key Takeaways

• The U.S. is forty times larger than the U.K., with a wide range of housing costs. Living in Mississippi, on average, is going to be more affordable than living in Connecticut.
• Overall, the cost of living in the U.K. is 15.5% lower than it is in the U.S.
• Rent prices in London are over a third (36.5%) lower than rent prices in New York City.
• The average monthly salary after taxes is 29.1% less in London than in NYC.

Comparing Costs in the U.S. vs. the U.K.

First, let’s compare two big cities: New York City and London. Overall, the cost of living in London is almost a third (29.5%) lower than in New York. Though rent prices in London are over a third (36.5%) lower than rent prices in New York, overall purchasing power in London is essentially the same as overall purchasing power in New York, with London inching ahead (.6% higher).

Certain other costs are more affordable in London, as well. Restaurants are about a quarter (23.7%) lower in London, and groceries are 39.3% lower. Full-day private preschool or kindergarten is 28.1% lower in London, and international primary school costs about half as much in London as it does in New York. (In London, it’s 55.4% lower.) However, New York does come out ahead in a few areas: for example, the average monthly salary (29.1% higher) and the cost of basic utilities for a 915-square-foot apartment (62.8% lower).

Zooming out, and taking the two countries as a whole, we find that it’s cheaper to live in the U.K. than it is to live in the U.S. Overall, there’s a 15.5% difference. However, Americans come out ahead when it comes to local purchasing power: it’s 18.5% higher in the United States.

Several items cost less in the U.K. The cost of groceries in the U.K. is about a quarter (24.3%) lower than in the U.S. Rent prices are over a quarter (27.3%) lower than in the U.S. The difference in restaurant prices is less significant: it’s 6.4% lower in the U.K.

However, gasoline is more expensive in the U.K. The cost in the U.K. of one gallon of gas is $6.81. In the U.S., it’s $3.53.

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, which enables them to skip long waiting times for some specialist appointments.

Utility costs in the United Kingdom for a 915-square-foot apartment are 44.3% higher than in the United States. However, internet access costs about half (45.7%) as much in the U.K. as it does in the U.S.

Important

The average monthly salary after taxes is almost a third (29.1%) less in London than in NYC.

How Economists Measure the Cost of Living

When economists and 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.

The most expensive cities include Zurich, Singapore, New York City, and Geneva.

What’s the Most Expensive Neighborhood in London?

Knightsbridge and Chelsea are the most expensive areas in London. Mayfair, Belgravia, and Notting Hill are also pricey.

What’s the Most Expensive Neighborhood in New York City?

The most expensive areas in New York City include 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 $224, 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 being the most expensive cities. And though the cost of living is less in the U.K., the local purchasing power is stronger in the U.S.