Bills people in the UK pay

Today’s article is an intro article to anybody leaving home for the first time or moving to the UK from abroad. We are going to talk about all the key bills you will likely need to consider as part of your cost of life. Buckle up, this is not a short list.

Housing

This one is a no-brainer. Unless you’re lucky enough to have a space in relative’s or friend’s house, you will need to pay for your own. I am going to categorise housing into 3 options: rent, own leasehold and own freehold. Rent is by far the most complicated and comes in different forms (rent a whole property, a room in a shared home, become a lodger, rent from council housing services, rent affordable property from a private housing association, rent a dorm from university if you are a student etc.) Whatever option you chose, if you are renting, you will pay a fee for the space you are in. Non-obligatory, but you will also want to consider renters’ insurance, in the UK known more as contents insurance for tenants.

If you have been lucky enough to be given a property to live in or able to buy one mortgaged or outright, the four walls also come with some costs. For ownership, aside from the cost of the purchase, you will also pay specific fees which differ between leasehold and freehold.

Leasehold costs will include: service charges, ground rent and building’s insurance. Freehold doesn’t come with any official charges, but you will want to purchase home insurance.

Water & sewage

I grew up in a house with a springwater well and private sewage treatment system, so the need to pay for clean water and sewage disposal was a bit of a shocker. It’s expensive, honestly. I live in London where water services are mainly supplied by Thames Water, but there are over 20 different suppliers in the United Kingdom. You have two options for your water supply: metered supply where you pay for how much you use, or assessed supply where you pay a fixed fee per year. The latter is available for properties where it is not possible to install a meter.

You can find the costs for the unmetered charges on Thames Water website. If another company supplies the property you live at, they probably have a version of this information on their website too.

Electricity

Off-grid life is no longer common in the UK. Most people live in properties which are connected to the electricity grid and they pay associated fees. There is around a dozen of companies providing electricity and they are all required to be transparent about the costs of their tariffs. The regulating body for energy companies is called Ofgem. Electricity is always metered and you only pay for what you use plus a standing fee (a fee for keeping your home connected to the grid). There are two main types of meter – a regular one and a prepayment one. The second kind is popular in particular in rental properties and is in fact up to 40% more expensive than the regular one. USwitch has a good article explaining the differences and what to do if your accommodation has a prepayment meter.

Gas or other fuels

Natural gas is used commonly both for cooking and heating. However, not all properties have access to gas. If your one does, you will need to account for the costs. Usually properties with gas come with a combi boiler, a type of heater which uses gas to heat water both for regular use and for heating of the property. Same as with electricity, it is always metered. Most electricity companies also offer gas tariffs.

If your home uses other fuel (such as oil, wood or coal for heating), you will need to buy these yourself.

Council tax

Council tax is an annual tax collected by your local authority. It is paid per property rather than per individual in a property. If you are a full time student, you will be exempt from the cost (you must provide a letter from your school/university). If you are the only person living in the property, you will be eligible for a discount. If you fail to pay the council tax, your local authority will not hesitate to issue summons – one step from that will ruin result in a court case and potentially your credit score.

Council tax pays for variety of things in your local area, from street cleaning to trading standards management it’s the money your council will use to plug any holes left in the budget after central government funding. It’s complicated and it’s annoying, so make sure you stay on top of it.

Garden waste

If you are lucky to have a garden, you might want to consider having a garden waste bin. These are costed outside of the rubbish disposal covered by your council tax payments. This cost is non-compulsory and only makes sense if you happen to have a garden which produces a lot of green waste.

Transportation

Public transport in the UK is pretty good, but not particularly cheap. Most areas offer seasonal passes which for commuters can be a significant saving. The types of seasonal travel cards can also be limited to a single mode of transport, which makes them even more affordable.

Seasonal passes include: annual, 6-monthly, quarterly, monthly, weekly and daily. One off tickets are also available.

Available means of transport include: trains on specific route, trains within specific area, trams, buses, coaches and ferries.

The use of contactless card payments is also now widely available in all large cities and majority of small towns and even village. UK operates as a largely cashless economy, so if you are coming in from abroad and don’t have an account, consider using currency exchange card to avoid fees with your bank.

If you prefer personal transportation in form of a car or a motorbike, the two key costs will include road tax and vehicle insurance. In order to insure your vehicle, it must have passed an MOT. Vehicles which fail to comply with both are often clamped or towed and the owners are required to pay additional fees for vehicle retrieval on top of any non-compliance fines.

It’s expensive to own a car in the UK, especially in the cities – in addition to aforementioned two costs, cities can operate additional schemes such as congestion and emissions free zones which require a fee to enter as well as charge for both resident and non-resident parking .

Internet

While in some countries free wi-fi is widely available, this is not the case across the UK. For a person visiting from abroad, your mobile phone might be your friend, especially if you are coming from the EEA. However, if you’d rather not rely on your mobile phone, there are tree key options for broadband available in most of the country: standard, fibre and mobile routers. If you are only visiting, the last one might be the best option. However, if you are staying for a while at one address, it might be useful to have internet connected to your address.

There is a wealth of providers on the market and high speed internet at least in teh cities can be purchased for less than £30 per month.

TV License

If you happen to watch any BBC programming, including via iPlayer, you will be required to purchase a TV license. BBC is the equivalent of state-funded television in any other country. It does not air commercial advertisements and offers surprising number of good documentaries and some decent TV dramas. At the time of writing it costs £157.50 per household. However, if you just want to watch the documentaries, some of them are now aired on Netflix too which works out at just over £70 per year for the cheapest subscription or just make some friends who have a TV.

The things you don’t have to pay for in the UK

While there is a fair amount of bills which we all need to budget for, there are also some things in the UK which you will not have to pay for, but which can be costly in other countries. These include:

  • bank accounts – unless you want your bank to provide you with additional services, you will not normally need to pay to have a bank account with a bank in the UK
  • education of minors – if you happen to be moving to the UK with children, unless you wish to pay for private schooling, the public one is free for school age children
  • healthcare – this incredible provision is limited to countries which hold reciprocatory healthcare agreement with your country of origin and to instances of urgent care. However, to access primary care and register to see a GP, you will need to provide a proof of address
  • hormonal contraception – this goes hand in hand with the healthcare access. To be fair, if you prefer non-hormonal contraception, you can get condoms for free at a sexual health clinic run by the NHS – all of which are also free
  • bust travel for the elderly – if you happen to be over the state pension limit and settling in the UK, you will be eligible for an older person’s travel pass. In all of the UK it allows you to travel on buses free. If you happen to have moved to London, trains and tube are also free with the pass within the city boundary
  • access to the biggest museums and art galleries – UK is the dream destination for art and history buffs – majority of the museums, including the BIG ones are in fact free to enter. So are the biggest art galleries

I hope the information contained here is useful. It provides a large snippet, but not a full picture of the financial obligations that come into consideration when living in the UK as these change from one individual to another. Are there any things which surprised you in this article?

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