OzTennis

Frankly this 2.5 thing is an old chestnut and might have worked sometime for someone but to use it as other than a very, very rough rule of thumb seems dubious. The above experience suggests 2 might be overdoing it. For other occupations and different locations it could be different. Why it is such a chestnut is that it apparently holds true whether the exchange rate is high $1.40's or $2.50+ and whatever prices and interest rates are in the 2 countries.

There is a standard of living thread but it mainly concentrates on cost of living and quality of life which are just 2 parts of many things which go to make up standard of living (says he telling granny to suck eggs). I guess the OP and the other contributors are merely concentrating on the material aspects of SOL. Look at any league tables for real GDP per capita etc and you'll see that the average person is slightly better off in one of the UK or Australia!

Ultimately other non-material factors need to be taken into account though. You could be better off or worse off financially by a move; you could be better off or worse off quality of life wise by a move. Actual experience can be the only test of that but appreciate OP wants advice before making the plunge.

Beoz

I've never heard anyone say the 2.5 let them down. Have you? Personally I think 2.3 is a better guide. It's a very simple guide so people who are moving from the UK to Oz don't have to bury themselves in spreadsheets and internet research.

Amazulu

2.5x is pure BE mumbo jumbo and is meaningless. All that matters is what you will earn and how long it will take you to buy the things that you want/need to buy

Bermudashorts

I think "2.5" is too specific and makes something sound more scientific than it really is, but time and time again people have mentioned that anything from around 2 to 2 and a bit or 2 and a half gives them a good measure of their purchasing power in UK versus Australia.

It is exactly the point that it does not change with fluctuating exchange rates, why would it? The cost of my groceries week on week in Australia does not fluctuate according to the performance of sterling.

BadgeIsBack

I'm not big on FX rates but those figures are a joke.
80k in London is a big salary make no mistake,. 70k is white collar 'clerical skilled' work. An analyst perhaps.

Perhaps 70k AUS is more like 30GBP, hard to say.

bcworld

Note that it says $80k = $71k not GBP80k = $71k.

big_matt

2.3 is no more useful than 2.5.

In fact 2.5 could become 2.3 in a short space of time if exchange rates move.

If people don't want to create a budget spreadsheet or do some internet research prior to making maybe the biggest financial and emotional move of their life then they probably don't deserve to get things right anyway.

I'm not accusing the OP of this, but it amazes me how many people on here seem obsessed with their salaries and what they earn compared to others etc. But to move country all they are prepared to do is multiply a single number by 2.5.

Bermudashorts

I think it makes far more sense than silly spreadsheets and estimates which never cover anything but the basics anyway based on what I have seen people post up.

And again moving exchange rates have no bearing on it. That is the thing many cannot seem to get a grip of. If sterling tanked tomorrow do you think your weekly shop in Australia the day after is going to cost any more or less? No of course it is not.

abi31

I always understood the 2.5 to relate to the comparison between nae in uk - approx 30k and oz - approx 75k

As such it does make sense as a rough guide - how financially comfortable you feel in one country could be comparable to another similar 1st world country with comparable standards of living. It also accommodates fluctuations between some things being costlier/ cheaper between the countries.

If nothing else people basing their requirements on 2.5 will apparently be even better off than hoped for provided they achieve that multiple.

(Eg I will be a teacher - examining the standard salaries suggests they are approx 2.5 times higher in oz - so I'm certainly happy about discussions suggesting the multiple is too high!)

Beoz

But that's the point. People are obsessed with maintaining their standard of living. Being able to afford to continue to do the things you like to do is important. It makes people happy.

When I was asked to move to Oz with my company their first offer was straight exchange rate offer. Back then it was about 1.6. I would have been foolish to accept that. My standard of living would have gone down significantly.

No one ever said there was an exact figure at 2.5 or 2.3 but its certainly not 1.7 where we are today ...... would you agree?

Beoz

So if a teacher is on a numeric 2.5 convertor then you can assume other jobs pay upward or lower in comparison. This means all other costs associated with living will be based on peoples earning capacity.

Buzzy--Bee

The OP is moving from London to Melbourne.

I also moved from London to Melbourne, in 2007 when exchange rates were $2.5 to £1. Coincidentally, my Australian salary was also $2.5 to £1.

Overall, I did not find I could buy much more or less here than I could in London. Therefore I consider 2.5 to 1 was a good "ready reckoner"

Exchange rates have nothing to do with it. My cost of living here does not go up or down very much depending on the AU$ exchange rate as most of my expenses are housing, food and petrol, none of which are affected dramatically by exchange rates.

I stand by 2.5 to 1 as a rough reckoner. If you earned £40,000 in London you will need to earn approximately $100,000 here to buy the same stuff.

Just my experiences, and I've lived the "London to Melbourne" move. Not from anywhere else in the UK. Not to anywhere else in Australia.

BB

bcworld

Personally I find the 2.5 a little high.

But it has its uses. One of them is to try and stop people comparing salaries based on the exchange rate alone.

So no one should ever consider an Australian salary they are being offered in terms of...'...but that's £xx,xxx'. That could be a great way to undersell yourself and get offered a below market rate salary.

I reckon my current multiple is about 2x what I could get in London and that it offers a better material standard of living - once again, no consideration given to intangible things like weather, culture etc.

Famous 5

I can only talk about Sydney as I have no experience of the Melbourne market, but there has been recent downward pressure on rates and the main 4 banks tend to use rate tables that dictate the rate for the role. There is more flexibility with other companies and obviously it pays to contract directly rather than through an agent, but usually you would need to establish a network before you could do that.

The only observation I would make is the cost of travel in/from Australia. When we lived in the UK we would have several overseas holidays a year and that has not been the case since we moved here. Our circumstances are now different in that two of our offspring are away at uni which is costing us a fortune in accommodation costs, so I can't do a fair comparison, but we have been materially worse off since moving here.

LeeWillo

Someone told me something which sounds a bit daft but when you work it out it isn't unreasonable.

Work out how many pints of beer you could buy for your monthly pay in the UK where you live, then do the same for your proposed monthly pay where you intend to live.

So 650 per day GBP, @ 3.30 a pint say is 196.96 pints.

In Melbourne, to get 196.96 pints at roughly $7 a pint, you would need $1378.00

That does seem a lot! I don't know if my price per pint is right, it has been a long time since I have bought a pint from a pub. Australian social life tends to erradicate drinking in a pub for me!