Some things are more expensive in the UK and some things are cheaper and it sometimes depends on how you look at it. With most goods, you can expect them to cost the same in pounds as they do in dollars, ie. if a cd cost $13.99 in US, and costs IRO £13.99 in the UK, but if you consider the exchange rate, you’re paying over $20 for a cd here.

This is not always the case, and things are improving as consumers are demanding to pay the same as other countries. One area in which the UK costs are terrible is petrol (gasoline) prices. They’re currently near £1.40 per litre. That’s near £5.50 per gallon, with exchange rate near $9.00 per gallon, or in a car that gets 25mpg, it will get you 25 miles. These prices are largely due to taxes.

Sales tax, otherwise known as Value Added Tax (VAT) was 17.5% until 2010 when it was lowered to 15% to boost the economy, but then it was increased to 20% for 2011. 

Typical Expenses

• Income Tax (seems around 20%)
• Council Tax (around £90-120/month, depending on property value, area, etc.)
• TV License (£12/month)
• National Insurance (taken with income tax from wages)
• VAT (17.5%, 20%)
• Vehicle License/MOT(emissions and safety tests)/Insurance (License : £210 per year at post office, unless you have a 4x4 and it's then around twice that, MOT tests IRO £40 at test centres, Insurance (dependent on vehicle and driver but anywhere from £400 to £1500 per year for average cars)
• Housing/Utilities

The Savings Offset

• Free health care (because you paid National Insurance)
• Not needing a car if rail/bus services are convenient
• Company car (many employers supply these, if you’re lucky)
• One less tax to pay, ie. not state AND federal as in the US
• More exotic vacations for less money, Greece, Paris, etc. (a 2 week vacation in Crete for £180 each! included airfare and hotel)

Prices in general: milk : 1.20p per 2 litres; bread : 65-1.45p per loaf; eggs : £1.69 per 1/2 doz; gas/petrol(sky high for the taxes) Petrol : 1.30p per litre, Diesel : 1.35p per litre (5 litres to a gallon); cigarettes : £4.90 pack of 20, give or take 50p depending on your brand of choice; you’ll find utility prices discussed elsewhere in the site.

One University site states: “In total, for a full year, a single student will need about £7500 - £9500 (2000 figures) to meet the basic expenses of living in London (excluding tuition fees).

The BBC has published an article that estimates a single person needs at least £13,400 annually, with links to the budgets and charts of expenditure breakdowns.  http://news.bbc.co.uk/1/hi/business/7481927.stm