I’m standing in the park with a couple of other mums. The Easter break has just wrapped up.
“I easily spent about £60 a day,” one of them sighs. “I took picnics with me, but then we’d have a coffee and hop on the tube. Then we were in town and an ice cream van arrived out of nowhere; it was hot, I felt like I couldn’t be tight and stop them from having a treat. But one cone was £7!”
I nod. Over the holidays I also took the kids into the city centre for a day out and spent most of it saying no to their requests. As we walked around the shops I had to tell them we were “only window shopping”.
All of us have homes in a desirable part of West London (where a three-bedroom property sells for a million). Many of us also have professional jobs that put us in the a high earning bracket. On paper, we’re rich. But for months, the main topic of conversation within my friendship group has been how broke we feel – and the soaring cost of life in the capital.
London’s
always been expensive
but lately it’s never felt so bad. Eighteenth century poet William Shenstone once famously said: “Nothing is certain in London but expense”, and he was right – but I still don’t think he’d be prepared to pay £7.99 for a bubble tea.
New statistics show Londoners comfortably earn the most per head in the UK, but are living more frugally than anywhere else. The report, by the Institute for Fiscal Studies and the Economic Statistics Centre of Excellence, found people in the capital earn 40 per cent more than the UK average, but have less left in their bank accounts to spend on goods and services each month because of
housing costs
.
“Our findings challenge the conventional wisdom that the typical London household enjoys higher living standards than their counterparts across the country,” said study author Gautam Vyas.
Squeezed by soaring mortgages,
rental costs and bills
, the middle-class poor are quietly cutting back on ‘luxuries’. We’re walking or cycling to save money on transport – “a Lime bike feels like a special treat,” one colleague sighs. We’re swapping expensive theme parks or day trips for free museums and parks.
My own earnings fluctuate as a freelance journalist, columnist and consultant – they can range from £3-5K a month, but I’m the main earner and have two young kids to support. Like most mums I know, I cut and colour my own hair at home rather than going to a salon which can cost as much as £200). Our holidays are spent in London or on UK breaks.
Eating out is a particular bone of contention – lunch for four can easily cost £100, so I take sandwiches and snacks in my bag instead. Our local McDonald’s is always heaving with
middle class parents
raving about how it’s the one place they can buy lunch for their family without breaking out in a sweat.
Largely, these confessions are whispers between friends. Living in London, in neighbourhoods full of apparently high-earning, highly educated folk, there can be a lot of shame when your child can’t keep up with their peers’ lifestyles.
Frugality isn’t just for parents. A doctor friend living in leafy Dulwich says: “I’m
earning more
than I ever have, but have nothing to show for it by the end of the month..it’s just gone, on transport, groceries and bills. I’m trying to save for the future, so take my lunch in every day, and buy clothes on Vinted. And I’m really particular on going out – I meet friends for walks instead of meals, and rarely going to the theatre or cinema.
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“It seems a bit of a waste – restaurants, culture, that’s a big part of the draw of living in London. You do wonder what the point of living here is, to spend your life working and saving.”
Young professionals, who come to London to enjoy their 20s and 30s, are leading a dull existence – no wonder clubs and pubs are closing at record rates.
I spoke to Tim who’s in his late twenties and has a good job at a marketing agency: “I always looked forward to living in London (I grew up in Cheltenham), but it sucks. Although
my salary is £65k
, my rent is £2,000 a month, not including bills.
“All of my friends go out on weekends and love to eat out and do brunch. I can only go now and then. I do batch cooking on a Sunday night and then take lunches in a Tupperware. I will treat myself to a Blank Street matcha [drink] on a Friday. [If we do work drinks at the pub] I can’t afford to buy rounds for colleagues without worrying about it later”.
Clare Seal, a financial coach and author, summarises the problem thus: “With the cost of basic bills and essentials so high, it’s little wonder that people on good salaries are struggling and feeling “broke”. Long gone are the days when living costs were low and small luxuries were everyday – now, the opposite is true.”
She argues that when the cost of living began to rise in the years after Covid, people in London could work from home and save on travel, lunch and coffee costs, but this is changing with employers increasingly asking workers to come into the office more.
The median average salary in London is £47,455. There are obviously differences in terms of what people spend each month (depending on rent, number of rooms, and whether they have dependents) – but one study, conducted by Time Out in 2023, revealed that you need to earn about £79,500 annually to live a ‘comfortable life’.
There are people in London with money to burn – on our recent Easter day out I watched as other parents queued to get exclusive Jellycat toys at Selfridges. I picked up a toy burger – it was £30. So, although
times are tough
for Britons everywhere, it’s a shock when you’ve lived in the capital all your life and you’re surrounded by wealth. The people I spoke to took home different salaries each month, had diverse outgoings but still felt broke and worried about their income nonetheless.
For many in London the areas they live in – sometimes areas they’ve grown up in – have become gentrified, increasing the cost of living there and wealth gaps between households. Nicola, a freelance writer, who lives in east London, says: “I grew up here, and thought I’d always live here, but it has gone through immense change and it can be alienating to now be in a community with families living in houses worth over £1m. Play dates, birthdays, gifts, and activities can all be awkward to navigate [because of the wealth gap].”
How London became unaffordable
- The average price of rent in London is £2,695 per month, according to Rightmove. Costs for inner London are slightly higher, at £3,180, whereas the figure for outer London is around £2,341
- Pints in the capital cost £6.50 on average, around £1.56 more than the national average
- Average wages in London are £49,455, almost £20,000 more than in regions with the lowest salaries
- London is one of, if not the most expensive, cities in the world for public transport – a single adult tube ride in zone 1 is £2.80-£2.90
- 57,020 people left London in 2024 – though that is a 45 per cent fall on the numbers who left during the pandemic
- The average London home now costs 14 times the typical household income
She earns £4,000 a month. “Our rent is £1,300, but that’s not including bills which are going up all the time. When it’s winter the heating is on for two hours max, baths are shared, we don’t eat meat anymore, and clothes are bought second hand. The kids are entitled to one free club at school and we don’t do any others.”
So what is the solution? The pandemic exodus from London has arguably slowed down, but the
closure of primary schools in the capital
shows its unaffordability is continuing to drive residents away. Financial coach Clare Seal fears it could lead to a brain drain: “There’s a risk that talented and creative people will be lost from London as they seek a less fraught, anxious existence elsewhere.”
During lockdown I considered moving out of London, to join the clichéd ranks now inhabiting Margate, Ramsgate, or Hastings, but was worried I’d miss out on work opportunities so I stayed, despite struggling with the costs.
So, along with cutting back on luxuries, I and others are resigning ourselves to working harder for longer. I can’t see myself retiring any time soon (I’m in my 50s).
The thing is, I love London – I was born here and have lived in a myriad of different post codes, from the party house in Kensal Rise to the flat so close to Wembley Stadium I could hear the roars from the football crowd whilst making dinner.
There are so many advantages to living here – the diversity, the restaurants and types of cuisine, the wealth of art galleries, pubs and theatres. A spring day in the centre of London… well, it just can’t be beaten can it? As long as you bring snacks. And your coffee. And just about everything else too.