Photo by Hugo Sousa on Unsplash
How Much Does it Cost to Live the FIRE Life in London?
Hello, and welcome to interview #5 in the How Much Does it Cost to Live the FIRE Life interview series! Part interview, part spending report, this series will introduce us to FIRE* seekers from all over the world.
They’ll reveal their essential spending and money-saving tips—all to help us learn new ways to save on our own expenses. As a bonus, we’ll also get to discover the unique advantages and challenges of living in different places around the globe.
*FIRE stands for financial independence, retire early. It’s also known as FI—financial independence. For more info, see my FI School series—it’ll teach you everything you need to know about FI (and FIRE).
About the interview series
I created an intro page for this interview series to help explain what it’s about, what’s included (or not) and why. I’ll also link to all the interviews from the intro page—so check back there to see the entire collection.
Jump to the series intro: How Much Does it Cost to Live the FIRE Life? (The Interview Series)
Disclosure: These interviews may include affiliate links. That means I’ll receive a commission if you make a purchase through my links—at no extra cost to you. Thank you!
Interview #5: Lionel from London, England
In today’s interview, we’ll meet Lionel Piguet, who lives the FIRE life in London with his girlfriend. Lionel started his blog, Cent by Cent, in November 2020 where he writes about personal finance, productivity, and his journey to financial independence.
Lionel’s also very active on Twitter, where he frequently shares interesting, thought-provoking tweets. (Follow him there for even more great content!) I hope you enjoy my interview with Lionel!
Table of Contents
Part 1
Part 2
Part 3
Part 4
Part 1: Getting to know you
Tell us about yourself
I currently live in Zone 2 London with my girlfriend. We both work full time and share our expenses. We have been in this living situation since September 2020.
Where are you in your journey to FIRE?
Our journey to FIRE only truly started in late 2019 as we got into investing and saw the potential for a financially free life!
What type of FIRE are you aiming for? (FIRE, Lean FIRE, or Fat FIRE*)
How Chrissy defines FIRE, Lean FIRE, and Fat FIRE
Some people define Lean FIRE as under $40k in annual spending; FIRE as $40–$100k in annual spending; and Fat FIRE as $100k+ in annual spending.
However, I prefer looser definitions that are not based on hard numbers. That’s because $100k could be Fat FIRE in a small Canadian town but Lean FIRE in San Francisco. That said, here are my definitions:
- Lean FIRE: The essentials with little or no discretionary spending.
- FIRE: The essentials plus a comfortable amount of discretionary spending.
- Fat FIRE: The essentials plus a luxurious amount of discretionary spending.
My aim isn’t to retire as such but to build a secure financial net. Therefore if I had to define it it would be Lean FIRE the goal is to enable us to start our own businesses and be safe doing so.
Tell us about your living situation
We currently rent a 1-bedroom, 55 square metre (592 square foot) furnished apartment in the Zone 2 London. Currently, it’s just my partner and I sharing the apartment.
London is very well connected. My commute by public transit is around 40 minutes and 15 minutes for my partner. We have 2 metro stations within 5 minutes and a bus stop 2 minutes away.
Why did you choose to live in London?
I used to live in a provincial town nearby but overall my cost of living was lowered by moving in with my partner in the city centre. It’s a great spot as a young person will see down the road.
Part 2: The expenses
In this section, Lionel shares his essential expenses and best money-saving tips. But before we get started, let’s review some important notes:
Important notes about the numbers
- Only essential expenses are included.
- Discretionary expenses (e.g. travel, gifts, etc.) are not included.
- Expenses are rounded to the nearest dollar.
- Expenses are displayed in the interviewee’s home currency.
- In this interview, the home currency is British Pounds—£.
- For your convenience, I’ve included a currency converter for each expense.
For detailed explanations about which expenses are included (or not) see my How Much Does it Cost to Live the FIRE Life intro post.
1. How much does housing cost in London?
Rent (£1,500/month; £18,000/year)
We benefited of the COVID-19 crisis to move and get an advantageous rent and netted a discount of £300 pcm (per calendar month). I would also look into the long term listings as they are more flexible on price.
Council tax (£62/month; £744/year)
We chose our borough based on the council tax as it’s the cheapest in London.
Note: Council tax is similar to property tax in Canada and the US. However, in England, it’s not necessarily the landlord who pays this tax. It depends on the situation, but it’s generally whoever lives in the property that’s responsible for paying the council tax.
Strata/HOA fees (£0)
HOA don’t exist as such in the UK, you get free reign on your property. There are rules to abide by in the building itself but all maintenance cost is managed by the landlord.
A strata is called a leasehold where someone else owns the land and rents it out to you for a nominal fee. This is taken care of by the landlord directly. If you were to earn part of the land it would be a free-hold.
Home insurance (£0)
Home insurance is taken in charge by the landlord. This only covers the building and the owners items. In our case as the flat was furnished we elected against tenants insurance. The likelihood of a fire or flood being low in our neighbourhood.
Home maintenance (£10/month; £120/year)
Note: this category includes home maintenance, repairs, cleaning, and improvements; household goods and supplies; furniture, appliances, computers and mobile devices.
We buy our supplies bulk and do our research for second hand appliances when it’s hygienically feasible.
2. How much does transportation cost in London?
Vehicle insurance, gas, maintenance (£0)
Currently we don’t plan on getting a car as it would impair our geo-mobility. We are happy to use public transport and can borrow our friend’s car when needed. We would consider an electric vehicle eventually as they come with a lower cost of maintenance and are not required to pay emission tax.
Bike maintenance (£0)
Currently we do not own a bike but are on the fence of acquiring one. In our neighbourhood the council has set up free storage units which would reduce the cost of maintenance. I also suspect that we wouldn’t ride them enough to incur any cost.
Parking and tolls (£0)
We don’t have a car, but if we were to get one, the cost for parking in our area is £160 per year. If you drive an EV, charging is free in the street. Additionally, Highways are free to ride in the UK although it leads to pot holes it significantly decreases the cost.
Transit (£150/month; £1,800)
A discounted traveller card is necessary as it gives you 30% off when travelling off peak. It makes all the difference a trip into Zone 1 goes from £2.00 to £1.50. It allows us not only to save on transportation to and from work but to save on weekend excursions.
3. How much does food cost in London?
Groceries (£180/month; £2,160/year)
We always shop the discounts and make sure we get the best rates possible and if possible get our food from the clearance shelf. We make our own bread and meat substitutes (we are vegetarian) which saves massive costs.
Related reading: Detailed Flashfood Review (Groceries for 50-70% Off) and How to Save Money on Groceries (36 Valuable Tips)
Eating out (£55/month; £660/year)
We stick to twice a month and look at deals if possible, We treat ourselves for special dates when we can.
4. How much do utilities and bills cost in London?
Natural gas and electricity (£48/month; £576/year)
Gas and electricity are hand in hand! Shop around as much as you can and never sign a contract. We check semestrial (every six months) our cost and see if we can move to a better provider.
Water (£16/month; £192/year)
No choice here only 1 option so yeah we bite the bullet. Unfortunately our flat isn’t metered; it leads to us paying a flat fee that is charged every April. Thankfully it hasn’t risen throughout the years and covers both clean and grey water.
Garbage and recycling (£0)
Garbage collection is covered in the council tax here. With daily pick up for waste and bi-weekly pick up for recyclables. The recyclable bags are also provided upon request by the council.
Internet (£27/month; £324/year)
As we both work from home we elected for Fiber wifi to make sure we can both be in a meeting at the same time.
Home phone (£0)
Officially, you get a home line when you acquire WiFi. It comes with unlimited calls to other home lines. We have elected against using the number as our mobiles work just fine. I’ve yet to meet people still using the landlines here.
Cell phones (£25/month; £300/year)
My partner is at £5 per month I personally spend more as I need to include Switzerland in my phone plan.
Streaming entertainment (£8/month; £96/year)
We pool resources with friends when it comes to Netflix or Amazon Prime.
5. How much do other essentials cost in London?
Life and disability insurance (£0)
Just like medical insurance, disability is covered by the NHS and comes with many benefits if needed. I also elected to have private insurance to cover us. As for life insurance it didn’t make sense at our age quite yet. We will reconsider it once we are married or have dependents.
Medical insurance (£10/month; £120/year)
The NHS (National Health Service) is taken out straight out of your income as a tax. I decide to pay an extra £10 a month to cover us with private insurance and travel insurance.
Out-of-pocket medical expenses (£0)
The NHS covers everything, the only potential cost would be paying £9 when prescribed medicine. Thankfully, both my girlfriend and I are in good health and avoid visits to the pharmacy.
Clothing and footwear (£15/month; £180/year)
We are minimalists and only buy when absolutely necessary. We also sell our used clothes on Depop.
Personal care
This category includes: haircuts, toiletries and grooming services and supplies.
I added this category after Lionel had already completed his interview. If he’s able to send me his numbers later, I’ll update this section.
Technology
This category includes essential technology: software and hardware purchases, upgrades, maintenance, and repairs. Non-essentials (video games and consoles, e-readers, security cameras, etc.) aren’t included.
I also added this category after Lionel had already completed his interview. If he’s able to send me his numbers later, I’ll update this section.
Part 3: Adding it all up
Now that we’ve detailed all of Lionel’s essential expenses, it’s time to add everything up in some nice, organized tables!
Important notes about the numbers
- Only essential expenses are included.
- Discretionary expenses (e.g. travel, gifts, etc.) are not included.
- Expenses are rounded to the nearest dollar.
- Expenses are displayed in the interviewee’s home currency.
- In this interview, the home currency is British Pounds—£.
- For your convenience, I’ve included a currency converter with each table.
For detailed explanations about which expenses are included (or not) see my How Much Does it Cost to Live the FIRE Life intro post.
How much does it cost to live the FIRE life in London?
1. Housing
| Expense | Monthly (GBP) | Annual (GBP) |
|---|---|---|
| Rent | £1,500 | £18,000 |
| Property tax | £62 | £744 |
| Strata/HOA fees | £0 | £0 |
| Home insurance | £0 | £0 |
| Maintenance | £10 | £120 |
| TOTAL | £1,572 | £18,864 |
2. Transportation
| Expense | Monthly (GBP) | Annual (GBP) |
|---|---|---|
| Vehicle insurance | £0 | £0 |
| Gas | £0 | £0 |
| Vehicle maintenance | £0 | £0 |
| Bike maintenance | £0 | £0 |
| Parking and tolls | £0 | £0 |
| Transit | £150 | £1,800 |
| TOTAL | £150 | £1,800 |
3. Food
| Expense | Monthly (GBP) | Annual (GBP) |
|---|---|---|
| Groceries | £180 | £2,160 |
| Eating out | £55 | £660 |
| TOTAL | £235 | £2,820 |
4. Utilities and bills
| Expense | Monthly (GBP) | Annual (GBP) |
|---|---|---|
| Natural gas and electricity | £48 | £576 |
| Water | £16 | £192 |
| Garbage | £0 | £0 |
| Internet | £27 | £324 |
| Home phone | £0 | £0 |
| Cell phones | £25 | £300 |
| Streaming entertainment | £8 | £96 |
| TOTAL | £124 | £1,488 |
5. Other essentials
| Expense | Monthly (GBP) | Annual (GBP) |
|---|---|---|
| Life and disability insurance | £0 | £0 |
| Medical insurance | £10 | £120 |
| Out-of-pocket medical expenses | £0 | £0 |
| Clothing and footwear | £15 | £180 |
| Personal care | To be added later | To be added later |
| Technology | To be added later | To be added later |
| TOTAL | £25 | £300 |
Grand totals
| Expense | Monthly (GBP) | Annual (GBP) |
|---|---|---|
| Housing | £1,572 | £18,864 |
| Transportation | £150 | £1,800 |
| Food | £235 | £2,820 |
| Utilities and bills | £124 | £1,488 |
| Other essentials | £25 | £300 |
| TOTAL | £2,106 | £25,272 |
Part 4: Other expenses
This is a special section that’s just for fun! It’s the place for my interviewees to mention any expenses that they’ve done a really good job of optimizing and/or just want to share.
These expenses won’t be included in the totals (just to keep things as standardized as possible). I hope you find this section interesting and informative. Here’s one that Lionel wanted to share:
Travel
As I work for a large hotel chain we make the most of away weekends as we can benefit of very affordable hotel rates. Of course we don’t do this during the pandemic.
Chrissy’s closing thoughts
Thanks to Lionel for sharing his essential spending with us. London is one of the most expensive cities in the world, yet Lionel and his girlfriend prove that you can live affordably in a HCOL city!
For example, they’ve cleverly chosen a borough with the lowest council tax in London. This makes a big difference in their housing costs (which is their largest essential expense.)
Lionel and his girlfriend have also found ways to keep the rest of their expenses incredibly low. I’m beyond impressed with their minimalist budget for all their other essentials:
- Opting to use public transportation instead of owning vehicles.
- Eating vegetarian.
- Shopping around for the lowest utility rates.
- An overall mindful approach to their expenses.
All of their spending decisions have been made with careful consideration for their budget, needs, and the value each expense provides. In my opinion, that thoughtfulness is what leads to huge savings with little to no deprivation.
Well done, Lionel! Perhaps other young Londoners will discover this interview and be inspired to cut their essential expenses. (And maybe even be motivated to pursue FIRE! 🔥)
Connect with Lionel
I hope you enjoyed Lionel’s interview. For more of his content, be sure to visit him on his blog, Cent by Cent, or connect with him on Twitter.
Share your thoughts
Were you surprised by Lionel’s essential expenses? Are any of them significantly different from where you live? Share your thoughts in the comments, along with your own money saving tips!
Ana lives in Kitchener, Ontario with her family of six (!) Learn how she and her family find creative ways to live the FIRE life—despite her larger-than-average house and household.
T lives near Fredericton, New Brunswick with her husband and son. Can you guess what costs more (or less) in her suburb? You may be surprised to find out!
Visit the intro page to learn more about the what and why behind the series and access the complete list of interviews.
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16 Comments
Steve @The Frugal Expat
March 30, 2021 at 10:32 pmThis is a great view into a FIRE budget in London. Thanks to Lionel for sharing how he spends his money. I was a little shocked about the council tax. That is crazy that the tenants pay the so called “property tax.” Each place is different. That is a great news you guys found a cheaper zone to live in.
I am truly amazed at the savings in food. Shopping around for the best deals is the way to go. That is how my wife and I do it. Eating vegetarian really does cut down the costs. We do not buy meat regualarly either so it really does make shopping quite cheaper.
Thank you Chrissy for this series. It really does open the eyes of so many different budgets in different parts of the world.
Chrissy
March 30, 2021 at 10:51 pmHi Steve—thanks for the early comment! Yes, the council tax is very different from property tax in Canada and the US, where (I’m pretty sure) it’s always the homeowner who pays it. It’s an interesting system for sure! Lionel and his girlfriend were very smart to consider this when picking a location to rent in. What a bonus that their apartment is still very central!
It sounds like Lionel’s very good at finding deals and the best prices on every expense. I am so impressed! As frugal as I’ve always been, I can’t say I was as optimized with my spending as Lionel when I was in my 20s! Thanks for reading and commenting, Steve. 🙂
Maria @ Handful of Thoughts
April 1, 2021 at 2:36 pmThese interviews are great. I feel like I’m living vicariously through the interviewees seeing as travel is not currently a thing.
I always find it interesting to hear how other people manage their money, What I really found interesting in this interview was Lionel’s decision not to get homeowner’s insurance. Seeing as he lives in a fully furnished place, the majority of the contents of the property belong to the landlord.
I can appreciate the cost savings throughout, but don’t know if I could share a space that is only 592 square feet. When we first started dating, my husband and I shared a 710 square foot condo and that felt tight at times. As a Canadian in the prairies I am spoiled by the availability of living space.
Chrissy
April 1, 2021 at 11:02 pmHi Maria—I’ve felt the same way about this series. It helps take away a little bit of my wanderlust right now!
That’s a great observation that Lionel doesn’t need homeowner’s insurance as he’s living in a fully furnished apartment. That’s an advantage I never considered!
I have been very spoiled and have only ever lived in houses, so I wouldn’t know what it’s like to live in much smaller quarters. Being an introvert, I don’t think it would be good for my sanity! I’m guessing Lionel and his girlfriend are very considerate of each other and/or extroverts who don’t mind the small space.
Thanks for sharing your experience as a Canadian in the Prairies! 😆
Mr. Dreamer
April 3, 2021 at 3:21 pmThank you both for sharing! Seems London, UK rent is similar to Toronto and Vancouver. More expensive than Montreal or Ottawa.
Europe is benefiting from much lower Internet and Phone cost. UK’s public transportation is incredibly efficient as well. How do they manage the food cost £180/month? They are vegetarians and vegetables are even more expensive than meat here. 1 cucumber for $2.29 but goes on sale for $0.99. Tomato is $5.48 / kg but occasionally goes on sale for $2.85 / kg. 180 is $330 CAD. Maybe UK prices are much cheaper.
In general, they spend $3662.72 CAD a month in a 1 BR apartment in London. More than what we pay in Canada’s capital region for 4 people. I wonder if the income is par with the cost of living. Same question for income and sale tax. I mean, for us Canadians we don’t know the full picture to say if their spending is lower than average or just OK to get by.
Chrissy
April 3, 2021 at 11:57 pmHi Mr. Dreamer—surprisingly, London rents are also more expensive than Vancouver’s! However NYC is very similar to London… which makes sense, given how popular and dense both those cities are.
Generally, it seems that internet and phone costs are lower (and service faster) in Europe and Asia compared to here in Canada. Same with public transportation. I think that population density plays a huge role in all those factors.
As for food costs, I’m beginning to see that those are often cheaper in bigger (more expensive) cities than in smaller (more affordable) areas. My guess is the volume of food that’s imported into a big city is larger, thereby lowering costs for consumers. There’s also more selection and competition, which also drives prices down. But I may be wrong! We will see as I publish more interviews.
I suppose you’re right—it’s hard to get really analytical with the numbers without the full picture. I can see all the gears in your brain turning, ha ha. I hope this series doesn’t drive you crazy with the lack of details!
GYM
April 3, 2021 at 11:55 pmThis was a cool interview! It doesn’t seem as expensive as I had thought London would be. Is dental care covered by the NHS too? Or is that considered extra?
Maria (Handful of Thoughts), we were in a 450 square foot apartment with 2 adults, 1 toddler, and one newborn, haha!!
Chrissy
April 4, 2021 at 12:03 amHi GYM—you’re right, it looks like London might be more affordable than most of us would expect! However, it could just be that Lionel is an uber-frugalist and spends way less than the average Londoner. I have another UK interview in the works, so maybe that will help shed more light on things. 👍
From what I’ve heard, the NHS does cover most dental care, which I find AMAZING. If only we had that here in Canada.
OMG, I remember when you were still living in your condo, but I didn’t know it was THAT small! Wow, you’re all a bunch of troopers. 😆
Chloe
April 9, 2021 at 5:12 amNo the nhs subsidises dental care but it is not covered in full by any stretch of the imagination.
Chrissy
April 9, 2021 at 7:52 pmHi Chloe—thanks for clarifying. That makes me feel less bad about Canada’s complete lack of dental coverage. 😬
David @ Filled With Money
April 5, 2021 at 8:05 pmJust as there are expensive areas in a LCOL city, there are affordable areas in a HCOL city. I don’t think I can keep those costs that low if I move to a LCOL city, I would be influenced by others way too much!
Chrissy
April 6, 2021 at 11:05 pmHi David—well that’s just a perfect line: “Just as there are expensive areas in a LCOL city, there are affordable areas in a HCOL city.” How right you are!
Bob Wen
April 8, 2021 at 7:57 amTheir monthly spend on food impressed me the most. As another poster mentioned, it would help to have some idea of their income (I’ll check their website for clues). I know that here in Canada, one of my sons earns $75K as a heavy mechanic, and in the UK he would earn 30% less than
that and be considered as having a good paying job (which by many standards, it is). Still, Lionel and his partner live in London where wages are potentially higher than elsewhere in the UK.
Chrissy
April 8, 2021 at 4:27 pmHi Bob—very interesting that your son would earn 30% less in the UK. That’s quite a big difference. It’s true, though, that location does matter. In general, it does seem that wages are somewhat commensurate, based on where you live. However, they’re clearly not 100% aligned in all industries and areas! Vancouver is a good example of this—wages have most certainly not kept up with our high real estate prices. 🙁
drplastickpicker
June 19, 2021 at 5:08 amI love this new series!!!
Chrissy
June 19, 2021 at 11:20 pmHi Dr. Plastic Picker—thank you, I’m so glad you like it! ♥