Is it cheaper to live in the US or the UK? Cost of living comparison 2025

When you hear someone say they’re moving from London to Austin, or from Chicago to Manchester, the first question isn’t usually why-it’s how much will it cost? The idea of packing up and relocating across the Atlantic isn’t just about culture shock or weather. For most people, it’s a financial decision. And in 2025, the gap between living in the US and the UK isn’t what it used to be. Some places are cheaper. Others are more expensive. And the truth? It depends on where you are, what you earn, and how you live.

Rent: The biggest difference

Rent is the single biggest factor in your monthly budget. In the UK, London still dominates the conversation. A one-bedroom apartment in central London averages £2,100 per month-around $2,650 USD. That’s more than double what you’d pay for a similar unit in cities like Atlanta, Cleveland, or Memphis in the US. But don’t assume the whole UK is like London. In Manchester, you can find the same apartment for £1,100 ($1,400). In Liverpool, it drops to £850 ($1,070).

In the US, housing costs swing wildly. San Francisco and New York City still top the charts. A one-bedroom in Manhattan? Around $3,800. But move to Des Moines, Iowa, and you’ll pay $950. In Raleigh, North Carolina, it’s $1,300. The US has more affordable options overall, but only if you’re willing to live outside major metro areas. The UK has fewer low-cost cities. Outside London, prices are lower-but not by much.

Food and groceries: The UK wins by a mile

Go to a supermarket in the US and you’ll notice something: prices are rising, and portion sizes are shrinking. A gallon of milk in New York costs $4.20. In London? £1.10, or $1.40. A dozen eggs? $3.80 in Chicago. £1.70 ($2.15) in Birmingham. A loaf of white bread? $2.80 in Los Angeles. £1.10 ($1.40) in Glasgow.

Why? The UK has tighter price controls on essentials, and supermarkets like Tesco and Sainsbury’s compete fiercely on basics. The US relies more on brand loyalty and private labels. You’ll pay more for the same name-brand cereal, but you’ll also find more bulk deals. Still, if you cook at home, your grocery bill will be noticeably lower in the UK. A family of four spends about £500 ($630) a month on groceries in the UK. In the US? $800-$1,000, depending on where you live.

Transportation: Gas, cars, and public transit

Gasoline in the UK is expensive-£1.70 per liter, which is about $6.40 per gallon. In the US, the national average is $3.40 per gallon. That’s nearly half. If you drive a lot, the US wins. But here’s the catch: most people in the UK don’t need to drive. Public transit is widespread, reliable, and affordable. A monthly London Underground pass costs £160 ($200). A comparable pass in New York? $132. In Chicago? $100. But outside major cities, public transport in the UK is still better than in most US towns.

Car ownership is another story. A new Toyota Corolla costs £25,000 ($31,500) in the UK. In the US, it’s $23,000. But UK car taxes and insurance are brutal. The average annual insurance premium for a 30-year-old driver in the UK is £1,500 ($1,900). In Texas? $1,200. In California? $2,100. So if you drive, the US is cheaper-but only if you live where you can actually drive.

Healthcare: The real game-changer

This is where the US and UK split completely. In the UK, healthcare is free at the point of use. You pay nothing for doctor visits, hospital stays, or most prescriptions. A prescription costs £9.65 ($12) if you’re not exempt. In the US, a single visit to a primary care doctor can cost $150-$300 without insurance. If you need a specialist, it’s $300-$600. A broken bone? $2,500-$5,000.

Most Americans get insurance through their job. If you’re self-employed, you’re on your own. A mid-tier health plan costs $500-$700 a month. Add the deductible, and you could pay $10,000 out-of-pocket before insurance kicks in. In the UK, you pay nothing. Even if you’re on a work visa, you pay the Immigration Health Surcharge-£1,035 per year ($1,300)-and then you’re covered. That’s a huge saving.

Childcare and education

If you have kids, this is the dealbreaker. In the UK, children aged 3-4 get 15-30 hours of free childcare per week. Full-time nursery for a toddler? Around £1,000-£1,500 a month. In the US? $1,500-$2,500. In cities like Boston or Seattle, it’s over $3,000.

Public education is free in both countries. But in the UK, state schools are generally better funded and more evenly distributed. In the US, school quality depends heavily on your zip code. If you want private school, UK fees average £15,000-£25,000 per year. US private schools? $20,000-$50,000. So for families, the UK offers more predictability and lower costs.

Taxes: What you keep after pay

Income tax in the UK is higher, but you get more back in services. The basic rate is 20% on income up to £50,270 ($63,000). Above that, it’s 40%. Add National Insurance-12% on earnings up to £50,270-and you’re paying around 32% on a $60,000 salary.

In the US, federal income tax on $60,000 is about 12-22%, depending on state. But you also pay Social Security (6.2%) and Medicare (1.45%). In states like California or New York, you pay state income tax too. So on a $60,000 salary, you might take home $42,000-$45,000 after taxes. In the UK? Around $40,000.

But here’s the key: in the UK, that $40,000 buys you healthcare, childcare support, and public transit. In the US, you’re paying for those yourself.

Utilities and internet

Electricity and gas bills are higher in the UK. The average monthly bill is £180 ($225). In the US, it’s $140-$180, depending on climate. Internet is cheaper in the US. A 100 Mbps plan costs £45 ($57) in the UK. In the US, you can get 300 Mbps for $50. But UK broadband is more consistent. US providers often throttle speeds or charge extra for data.

Who wins? It’s not one-size-fits-all

If you’re single, young, and work in tech or finance, you might prefer the US. Salaries are higher in cities like Seattle, Austin, or Boston. You can save more money-on paper. But if you get sick, need a dentist, or have a child, your savings vanish fast.

If you’re a family, a freelancer, or someone who values stability, the UK wins. Your monthly costs are lower. Your risks are lower. You don’t have to worry about losing coverage if you change jobs. You don’t pay $10,000 for a hospital visit. You don’t need to budget $2,000 a month for childcare.

The US is cheaper if you live in the right place and stay healthy. The UK is cheaper if you want to live without constant financial anxiety.

Real-life example: Two people, two paths

Emma, 32, works as a marketing manager. She earns $65,000 in Minneapolis. Her rent: $1,100. Groceries: $700. Car payment: $400. Insurance: $150. Health plan: $550. Childcare (one kid): $1,800. Total monthly outgoings: $4,700. She saves $1,500 a month.

Same job, same salary-£50,000 in Bristol, UK. Rent: £1,000 ($1,260). Groceries: £450 ($570). No car-she takes the bus. Health: $0. Childcare: £1,100 ($1,400). Internet and utilities: £150 ($190). Total monthly outgoings: £3,200 ($4,000). She saves £1,800 ($2,300).

Emma in the UK saves more, spends less on essentials, and has peace of mind. Emma in the US has higher take-home pay but higher hidden costs.

What about inflation and future costs?

In 2025, inflation in the UK is at 2.1%. In the US, it’s 2.8%. Wage growth is similar-around 3-4%. But the UK’s cost-of-living support programs are still active. Rent controls are being discussed in London. The US has no national rent control. Childcare subsidies are shrinking in many states. Healthcare costs keep rising.

If you’re planning to stay long-term, the UK’s system is more stable. The US system is more volatile. You might win big with a high salary. But one medical emergency, one job loss, or one child’s school fee can wipe out your advantage.

Final thought: It’s about risk, not just numbers

People think cheaper means lower rent or cheaper gas. But real affordability is about what happens when life goes wrong. In the US, one illness can bankrupt you. In the UK, you go to the doctor and pay nothing. In the US, you choose between childcare and groceries. In the UK, the state helps cover part of it. The UK isn’t perfect. It’s slower. It’s colder. But for most people, it’s safer. The US offers more money. But you pay for it-in stress, in bills, in uncertainty.