How much really??

Old Sep 13th 2011, 10:43 am
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Default How much really??

I've been pondering about this question due to recent threads so I hope I can ask this well so it will make sense so here goes.

There has been much debate about the cost of living in NZ and how expensive it is. I've never been under any illusion that I will make my fortune by going out to NZ as we want more of the outdoor living lifestyle.

Posts keep stating about this is expensive, that is expensive but I'm trying to understand this. The recession has hit most countries and everything is expensive these days. My shopping, running a car, household bills and childcare are killers and I feel I work to pay bills and not to live. I can't food shop for 'just bits' without spending £40-50 and believe you me I am a good budget shopper. All my bills have increased from insurance to household. I don't live beyond my means and I buy what I can afford.

How is NZ anymore expensive than the UK? I get confused sometimes with the talk of £ versus the $ and feel that possibly that some view NZ as expensive because it's not 3 for 1 anymore?? Therefore it's costly because the £ is not going as far as it use to and everything is compared. Still with me?? I know if I went to Australia with only £ and didn't have a job I would find it very expensive. But if I did have a job I would manage just like I do here by working hard and doing without.

As an example £40,000 in the UK is tough to live on in the UK with children, childcare etc but is $80,000 in NZ tough live off to? If so aren't both countries just as expensive because of the current economic climate?

I appreciate all the information people put on about expenses etc as it gets me thinking and helps make the ultimate decision of doing the right thing but I just really need to put the financial situation in perspective. Would appreciate others view and hope that I've explained myself clearly as sleep deprivation can impact upon your thought process/ability to speak!!
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Old Sep 13th 2011, 10:58 am
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Default Re: How much really??

I've said it before and I'll say it again, it depends where you are from in the UK and where you're going to in NZ.
Rural Scotland to rural Canterbury, I'm pretty much as well off/hard up as I was before. It's just much better weather in Canty and we're not governed by Europe....
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Old Sep 13th 2011, 11:12 am
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Default Re: How much really??

In a nutshell, wages are generally lower and costs are similar or more, plus you get taxed on EVERY dollar - no tax free allowance (approx 6k pa in UK is tax free).
GST recently went up...GST is on food and children's clothes whereas in UK, they are VAT free I think.
Things which are free at point of use/subsidised/low cost in UK such as NHS have associated costs here even for children quite often.
State schools have annual fees here known as 'donations' and you have to supply pens, stationery etc. No hot school dinner service they have to take a packed lunch.
Private school fees as a percentage of income are probably lower here than in the UK but not relevant for most people.
I did read a couple of years ago that house prices in NZ relative to income are among the highest in the OECD meaning that you may have to save/borrow more 'as a local' to get on the property ladder.

The exchange rate is only relevant when you are calculating the amount of capital you have to bring over from the UK (It is currently an excellent deal for those moving money NZ to UK). Thereafter what matters is what your 'after tax' amount of Kiwi dollars will be and what your dollar costs to live will be.
Don't forget to include life assurance, pensions etc in your figures....lastly one of the most outrageous costs of all is internet...they have data caps...I would be embarrassed to share our monthly internet expenditure so I won't.

I was back in the UK in July..it seemed a lot cheaper.
Eating out in NZ can seem cheap but I have glorified egg on toast for brunch in cafes that comes in between $15-20 depending on the cafe so relative to wages it isn't that cheap and portions tend to be small BUT you are not really expected to tip so you save there.
Seriously think very hard about the financials - you can't jet out of here very easily either as it costs a lot....or for very long with the ungenerous annual leave (compared to UK).

So I am willing to bet that on an equivalent income based on current exchange rate, life (if you have employment) in UK is probably less hard financially even in current climate.

Last edited by luvwelly; Sep 13th 2011 at 11:16 am.
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Old Sep 13th 2011, 6:40 pm
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Default Re: How much really??

Originally Posted by luvwelly
In a nutshell, wages are generally lower and costs are similar or more, plus you get taxed on EVERY dollar - no tax free allowance (approx 6k pa in UK is tax free).
GST recently went up...GST is on food and children's clothes whereas in UK, they are VAT free I think.
Things which are free at point of use/subsidised/low cost in UK such as NHS have associated costs here even for children quite often.
State schools have annual fees here known as 'donations' and you have to supply pens, stationery etc. No hot school dinner service they have to take a packed lunch.
Private school fees as a percentage of income are probably lower here than in the UK but not relevant for most people.
I did read a couple of years ago that house prices in NZ relative to income are among the highest in the OECD meaning that you may have to save/borrow more 'as a local' to get on the property ladder.

The exchange rate is only relevant when you are calculating the amount of capital you have to bring over from the UK (It is currently an excellent deal for those moving money NZ to UK). Thereafter what matters is what your 'after tax' amount of Kiwi dollars will be and what your dollar costs to live will be.
Don't forget to include life assurance, pensions etc in your figures....lastly one of the most outrageous costs of all is internet...they have data caps...I would be embarrassed to share our monthly internet expenditure so I won't.

I was back in the UK in July..it seemed a lot cheaper.
Eating out in NZ can seem cheap but I have glorified egg on toast for brunch in cafes that comes in between $15-20 depending on the cafe so relative to wages it isn't that cheap and portions tend to be small BUT you are not really expected to tip so you save there.
Seriously think very hard about the financials - you can't jet out of here very easily either as it costs a lot....or for very long with the ungenerous annual leave (compared to UK).

So I am willing to bet that on an equivalent income based on current exchange rate, life (if you have employment) in UK is probably less hard financially even in current climate.
Interesting stuff thanks. Can I ask about the costs or donations with schools? Also the holiday allowance is that for every company? I don't remember the holiday allowance when I worked out there other than I got them!

Other than the financial side do you feel your lifestyle is better?
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Old Sep 13th 2011, 6:42 pm
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Default Re: How much really??

Originally Posted by Woodlea
I've said it before and I'll say it again, it depends where you are from in the UK and where you're going to in NZ.
Rural Scotland to rural Canterbury, I'm pretty much as well off/hard up as I was before. It's just much better weather in Canty and we're not governed by Europe....
Kind of how I'm viewing it. Same hard graft for nowt but with better scenery!
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Old Sep 13th 2011, 7:13 pm
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Default Re: How much really??

Even if it was $3 to the pound the supermarkets would still seem expensive, Netto quality, Marks and Spencer prices.

It's probably the reason people don't seem as chubby in NZ.
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Old Sep 13th 2011, 9:44 pm
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Default Re: How much really??

Originally Posted by luvwelly
In plus you get taxed on EVERY dollar - no tax free allowance (approx 6k pa in UK is tax free).
.

Yes but generally tax is lower in NZ compared to the UK and Aus http://www.salaries.co.nz/ with

Avg. Salary Tax Rate
New Zealand NZD 49875 16.00%
Australia AUD 67116 20.39%
United Kingom GBP 25428 18.08%

In fact you will pay less tax as a % in NZ unless you earn less than $30k
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Old Sep 13th 2011, 10:16 pm
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Default Re: How much really??

The only way to do a comparison is to do it for your personal self . Each persons lot is different.

I get confused sometimes with the talk of £ versus the $ and feel that possibly that some view NZ as expensive because it's not 3 for 1 anymore?? Therefore it's costly because the £ is not going as far as it use to and everything is compared.
Yes, I get what you are saying. No. That's not what is happening. Not in my case anyway. Don't forget most and many of us have friends and family back in the UK. We're not that out of touch with what they can and can't afford or what their budgets might be. What's increased or how the job front is . These conversations take place.

Those that say NZ is not expensive might well be earning goodt money here. Whereas those on a limited income will have found living here expensive and getting more expensive.

I have noticed ,over the years, that those that feel NZ isn't a very restrictive , expensive place to live are very canny about their own earnings & what they brought over as a start up fund.

We find the place expensive, restrictive and therefore somewhat mundane. It was like that before global recession hit. We did our sums but the reality once here is different. I worry for our future lives here. Not just financially but for the quality of life itself.
We don't dislike the place. We like our house. The views are good.
Our lifestyle is not better here. It's different. Basic.

Our Hungarian friends also find it very expensive because of their earning power. They have to basically live in debt but they totally love the place. Why? Because they had lived in inner city Budapest & arrived with virtually nothing.

It all depends what you are coming from and going to.
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Old Sep 13th 2011, 10:22 pm
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Default Re: How much really??

As an example £40,000 in the UK is tough to live on in the UK with children, childcare etc but is $80,000 in NZ tough live off to?
I don't get this for comparison purposes unless this is going to reflect your own current salary to the one you hope to have here.

$80K is a good wage IMVHO. However it would depend where you would be living in NZ.
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Old Sep 13th 2011, 10:52 pm
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Default Re: How much really??

Originally Posted by MattandJax
Yes but generally tax is lower in NZ compared to the UK and Aus http://www.salaries.co.nz/ with

Avg. Salary Tax Rate
New Zealand NZD 49875 16.00%
Australia AUD 67116 20.39%
United Kingom GBP 25428 18.08%

In fact you will pay less tax as a % in NZ unless you earn less than $30k
Averages are meaningless. Everyone should do their individual calculation, there is also ACC levy (in NZ) and National Insurance (UK) to take into account. In both countries check the 'working for families' type tax credits and help with childcare etc etc ....complicated for sure but both countries have reasonably helpful Inland Revenue websites with calculators.
I think if you claim the 4 year worldwide income exemption in NZ, you can't get the 'working for families' stuff.

What I do know is that as a housewife in UK I feel more incentivised to do low paid self-employed type part-time work knowing first 6k is tax free..in NZ it seems like a waste of time by the time you have paid tax on 'buttons' earnings, so I do voluntary work instead here while kids at school and therefore don't have to make such a regular commitment as employment would bring.

Many people do come out here at the lower income end of earnings although we didn't. The recent tax changes benefitted higher earners for sure...GST increases fall disproportionately on those on more fixed incomes...just like 1980s UK all over again.

My lifestyle is different rather than better but I am not a typical case and we only came here for a posting and so have kept our UK house whilst renting here which means I can't afford to get 'too cosy' with NZ but nor would I want to...'groundhog day' '1950s timewarp' and being geographically trapped come to mind. Why do you think so many Kiwis leave?

I don't regret the posting because we didn't have to give anything up apart from frequent contact with relatives...that is a major 'pull back' factor though. I really hope this is the last Christmas I have to spend away from extended family.
I can see what it is like though and how expensive stuff is. The school donations are stated on the individual schools' websites, basically the higher the decile school (wealthier parents in the area) the higher the donation and the lower the Government funding for that school.

Working hours are also generally longer here and holidays less and yet you might feel you get more time with your family because you have a shorter commute...that is the main benefit to my OH. 10 min drive to the office instead of long UK train ride.
The weather, scenery, cafe and coffee culture are what I will miss when I leave but these vary across NZ. These are not enough to make me want to be permanently here in such a remote location. Great for a few years but what then?

Last edited by luvwelly; Sep 13th 2011 at 11:02 pm.
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Old Sep 13th 2011, 11:10 pm
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Default Re: How much really??

Originally Posted by luvwelly
Averages are meaningless. Everyone should do their individual calculation, there is also ACC levy (in NZ) and National Insurance (UK) to take into account.
Both include ACC and NI, it's got nothing to do with averages but a fact that above $30k a year you will pay less tax in NZ then in UK.

I do agree the lack of a basic rate band is scandalous and a real disincentive for part time workers.

Hopefully along with GST on fresh fruit and veg this is something that will be rectified in the near future.
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Old Sep 13th 2011, 11:15 pm
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Default Re: How much really??

Originally Posted by Scousebird
Interesting stuff thanks. Can I ask about the costs or donations with schools? Also the holiday allowance is that for every company? I don't remember the holiday allowance when I worked out there other than I got them!

Other than the financial side do you feel your lifestyle is better?
All I know is that even in a multinational company, the annual leave for employees in NZ (unless on special expat terms)is far less than that in UK/Europe and it does not go up much with length of service whereas in UK it usually does.

Look into sickness benefit too. In UK a decent employer keeps paying you for weeks if genuinely ill. In NZ the legal minimum entitlement to paid sick leave is as low as 5 days per year.
The NZ systems are different and so do not assume your cover is as good as it often is worse.
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Old Sep 13th 2011, 11:21 pm
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Default Re: How much really??

Originally Posted by MattandJax
Both include ACC and NI, it's got nothing to do with averages but a fact that above $30k a year you will pay less tax in NZ then in UK.
What do you get in UK for your tax, in comparison to NZ? Don't compare apples and oranges.
Schools, medical wise....it is all paid for one way or another; either through tax or in 'point of use' fees. But the burden falls differently and if you are not used to paying every time you visit the doctor, you need that in your NZ budget. Don't assume you will always be massively healthy.

Some people feel the need for private medical here because of the long waiting lists for elective surgery.
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Old Sep 13th 2011, 11:25 pm
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Default Re: How much really??

Originally Posted by MattandJax
I do agree the lack of a basic rate band is scandalous and a real disincentive for part time workers.

Hopefully along with GST on fresh fruit and veg this is something that will be rectified in the near future.
I don't share your hope re near future with Key set to triumph in November but then Labour never addressed these issues in their 9 years of power either. They have identified both while in opposition.
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Old Sep 14th 2011, 1:05 am
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Default Re: How much really??

To the OP, as you can see there is a less than clear answer to your questions. All I can do is offer my experience.

A year ago I compared the tax UK salary (£40,000) with NZ equivalent by exchange rate and the taxes came out about the same (excluding sales tax). There aren't many jobs in my sector at £80,000 advertised, although I think that would be achievable in time. I have however managed to get contract work which does pay the same as the UK on the current exchange rate, so my impression of costs is that the cost of living in Auckland is similar to London (what you are paying in rent/mortgage will of course affect this). As already reported, it depends on where you come from and where you moved to.

I would suggest looking up jobs you hope to apply for on seek (www.seek.co.nz). They don't often put salaries on, but you could drop them an email and ask what the salary range would be. If you can get a job on a similar salary to what you are on now, then you should be ok. However many can't, so I think that is a big issue.

Annual leave in NZ is 4 weeks. I thought is was the same in the UK, but I'm not sure as I was on 5 weeks in my last UK job. I do know a kiwi here on 5 weeks so maybe it is negotiable. Not sure.

Hope that helps
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