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Monday, April 25, 2011

Comapring UK and UAE Cost (and Standard) of Living

Rationale


Well, you can skip this part if you are not interested in why I am doing this comparison.

Having lived in the UAE as well as having recently moved to the UK, I can't live without making a comparison between the two. It's interesting to see how each place has something different to offer at a price significantly different from the other. Further, it's not just me; I have frequently seen compatriots who while working in the UK, discuss how life would have been in the UAE and vice versa. So, all of the following will make sense if you are settled in one of the two countries, and are considering to move to the other.

The Basics: Salary and Taxes


Let's start with the tax. Of course, there are no taxes in the UAE which means your take-home can be higher in the Middle Eastern country. But on a positive side, UK has to offer free health and basic education for all---so if you have school going children, the gap created by the tax free economy diminishes.

Pound SterlingWith a salary of £45,000 per annum you get a net wage of £2,700 a month (after tax) in the UK [1], which is roughly 16,500 AED [2]. In my opinion, somebody earning that much in the UK can earn around £20K AED per month in Dubai (or vice versa if your skill set is in equal demand). Of course, this is an over-simplification but that's what I believe to be correct as an approximation.

Cost of Living


So, we are done with earnings. Let's talk of the cost of living. No matter where you live, the most expensive components of one's monthly budget are "house rent" and "travelling" (plus bills in certain countries).

Dubai SkyscrappersOf course, your monthly rent depends on where you want to live; some neighbourhoods are cheaper than others. In fact, London is almost twice expensive than Leeds when it comes to house rent, and Bur Dubai (specially Jumeirah Lake Towers and surroundings) can be very expensive than Deira. And the further you live away from the hustle and bustle of city living, the cheaper it becomes.

So, instead of talking about the "cost of living" or exact expenses [3], I would like to talk about the difference in the "standard of living" one should expect from a transition.

The style of construction is very different between the two countries. In UK, the houses are small; usually a single bed room can hardly fit in anything apart from a single bed and a cupboard. Comparatively, most of the construction is new in Dubai and hence has a "modern" touch to it. And it's a little more spacious as well---one of my greatest grievances about the UK.

London CabLet's talk of public transport. While the transport system in the UK is very mature, it's costly enough to match a privately hired cab in the UAE! When it comes to taxi fares, you pay around £1 (more than 6 AED) per mile in the UK! So, if you don't own a car, the public transport is the way to go in the UK.

In short, while "luxury" can be a possible consideration in the UAE (once in a while), it's unthinkable for most of the people in the UK.

Further Considerations


A lot of people with Muslim background in the UK would prefer to move to an Islamic country as soon as their children enter teen-age. If that's your consideration, there is nothing to be worried about---just make a transition as soon as you get a chance, and the rest will be all fine.

On the other hand, in terms of acquiring skills, and learning new things, there is no comparison between the UAE and the UK. A man's real value is the skill he has acquired, and not what materialistic stuff he possesses. Isn't it?



References:
[1] Tax calculation via Listen to Tax Man
[2] Currency conversion via Google
[3] Grapeshisha Spreadsheet on Cost of Living in Dubai and Abu Dhabi