{ "media_type": "text", "post_content": "London is one of the most expensive places to live in the world. Why is the pay so bad?", "post_id": "61364be728dff500256e361f", "reply_count": 39, "vote_count": 5, "bowl_id": "58f81907c1ca28001625d527", "bowl_name": "Londoners in Consulting" }

London is one of the most expensive places to live in the world. Why is the pay so bad?

likesmart
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The difference in salaries is easily 1.8x to 2x in HCOL cities in the US vs London. Further, kids education is still pricey in London and real estate is just as bad. Healthcare is certainly much more expensive in the US, but the NHS is crap compared to US doctors if you have good insurance. I love London, certainly prefer it over NY and SF, but won't go back until I'm very senior with a bundle saved.

likesmart

Thanks for your response! The huge pay gap between London and NY/SF still seems unreasonable and unjust to me though. Cost of living are very similar but US counterparts make twice as much for the same job makes no sense to me.

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Throwing a few thoughts around this (given that I've recently moved to start a transfer in London with my company). So, yes, pay is really low compared to the US in nominal terms. And yes, living in London is expensive. But I think to make this comparison fairer you need to adjust for how much your salary "buys" in London vis-a-vis SF or NYC. Example NYC (USD) One bed flat well located in NYC - 4K to 5K (source: close friend who lived and worked there for a few years for a major bank) Overall daily expenses in NYC - around 0.8 - 1.5k (source same as above) Dining out at a steakhouse for one - good piece of steak + wine + 20% tip (at least) - USD 90 - 100 (source: myself. Spent this at a good steak house on a trip there not so long ago) Example: London (GBP) One bed flat well located - 1.6 - 2.4k (source: that's what I found around Marylebone, Fitzrovia, St John's Wood) Overall daily expenses - around 0.6 - 0.8k (source: experience during the last four months here) Dining out at a steakhouse for one - good piece of steak + wine + tip - 45 to 55 (source: went to a couple of steakhouses recently and that's what I paid) Now, everything is more or less half in London in it's corresponding currency compared to the US... Add on top of that what's been said about getting private healthcare on the US and things start to even out a little bit. My view after thinking about this a lot is that we do get paid less in London. When adjusting for what you can buy, the gap closes significantly but it is still in favour of the USA. Hope this somehow helps

likehelpful

This was supppper helpful tysm!

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Pay used to be decent when GBP was stronger.

likesmart

Because you still choose to work for the pay they offer…

funnylikesmart

QB1 - what a lame explanation!

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And folks in London definitely work less- people actually take time off in the summer no questions asked. And maternity leave isn’t a mere 3m and then you’re forced to come back or ‘lose your place in the line’. The US is perfect personally when you’re accelerating your career and saving cash but if you’re looking to have a family the UK wins for me

likefunny

Moving to industry is an easy way to get a pay increase. But generally moving to other smaller/more specialised firms can get you a 30%+ increase. Even Accenture can offer that and they aren’t boutique/more prestigious. Just moved to a different management consultancy for a 40% increase in base and potential 75% increase in TC. There’s a reason why Big 4 turnover is so high and why they rely on a steady supply of fresh graduates. 4 years in you’ll be lucky to have 20-30% of them still there. Saying that, Big 4 pay isn’t bad if you want to take it easy. That’s not really an option once you hit SM though

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Pay is worse but probably have to save less as health care, kids education is far less than the US. I’m British living in the US and definitely make more here but feel the need to save more. Also you can live further out in London and housing prices dramatically drop (not a thing in eg SF, esp as transport is horrendous in most of the country)

like

The SF / NY comparison is to give a like for like example - you can live outside of London and it’s incredibly cheap and still commute in as transport is so good. Not an option in major cities here

One thing that has not been mentioned here is the “burden” that employers have with employees. As an employee you have a lot of protection in addition to things like the NHS that are afforded to everyone. We do not work in “at will employment”. Notice periods are typically 1-3 months if you want to quit. It can become VERY difficult to fire someone, for better or for worse. This is very different in the US. As someone who employs a nanny, it took me a long time to realise myself the true cost of these things. And having benefitted myself from them, I can see the value.

likehelpful

I see I didn’t know that before. Thank you for sharing this was insightful

I think London only feels more comparable if you factor in kids and healthcare, it’s certainly not beyond that. The most expense private schools = the cheapest private schools here, and you can always find much cheaper housing the further out you go. Also if you need serious treatment for eg cancer, you’ll be paying something heavily out of pocket in the US. Also childcare, if that’s something you want is much cheaper - it’s double the price in the US

like

Maybe at the top top they are similar, but there are a lot of very good private schools that I’ve looked at that are way cheaper than I would expect for the quality (eg £3.5-5k a term). The difference is most obvious when comparing early years, for example daycare vs nursery.

There isn’t a trade union negotiating for fairness OP. Wages are closely linked to prices (total payroll costs easily exceed 80-85% of revenue in our sector). Per diems are much lower in the UK than in the US due to different buying patterns and competitive dynamics. Also an Fx effect. Since the pound weakened last decade there has not been a correction.

likehelpful

Agreed, especially on the FX point which a lot of people seem to forget. With the current labour shortage, we’ve seen the more boutique firms in my industry start paying much higher starting salaries. Let’s see if this becomes the norm.

like

It is tough for sure- even after seeing some benefits I still haven’t pulled the trigger on moving back as I know the pay cut will be there. But I do think the lifestyle, the travel will be much better but if you’re in your 20s, 30s the US salary probably is worth it

Yeah that makes sense. I’m thinking about moving to the UK for a couple years from the US, but I don’t want to give up my 6 figure salary

How much can I expect with 4 YOE at a Big 4 within Risk Advisory service line?

£67k for us

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