Is SA really cheaper than the UK?

A colleague at work recently returned from her holiday to SA.  She’s looking tanned, relaxed and has been gushing about her trip….which sounds amazing.  Yeah, I’m secretly jealous especially in the dark months of winter when I miss the sun.  Eavesdropping on her conversations, I kept hearing her say how cheap food in SA is, and cost of living is so much cheaper and joking about moving back. 

This puzzled me because I’ve done these sums before and I really don’t find SA cheaper than the UK.  In fact, the opposite is true according to my past research.  But, not wanting to be an obnoxious arse and correct her, I thought I’d do some number crunching again to see if anything has changed in the two and a bit years since we left SA.

So I started with the most obvious, and simple comparison…groceries.  This is an easy one to check by creating a trolley online with Tesco and PicknPay. I took my most recent shopping list and decided to enter these exact items in both retailers' online shops and see what the numbers told me.

I won’t bore you with the details of my shop, but we are a family of five and we shop weekly as we prefer fresh ingredients and cooking from scratch.  We do buy a lot of ingredients that are considered luxuries but we can afford it so I decided to keep this comparison true and enter my shopping list as I bought it.

The results:

Tesco: £57.72 or R1,027.49

PicknPay: £61.94 or R1,102.62

That’s quite a difference, we all know a fiver is worth quite a bit in the UK but so is R80 in SA.  So on groceries, UK comes up slightly cheaper (and with higher quality product in my opinion).

It doesn’t stop there, grocery shopping isn’t all that life is.  So what else can I compare?  Let’s try property to rent.  This is harder to compare because of the variables but I tried my best to be as fair as possible with comparison.  I settled on Reading vs the Northern suburbs of Joburg for my comparison.

DISCLAIMER: this is by no means an exact science and anyone smarter than me could come up with a better comparison.  There are loads of variables to consider but if you want to do your own comparison, it’s really easy and you will get a like for like breakdown of your own lifestyle.

Reading:

3 bed + study, detached property to let, with garden, garage and driveway and excellent transport connections.  In a good suburb of Reading with decent schools nearby – anyone in the UK knows that this is luxury living.  It is a gorgeous property, check it out here.

Rent: £1,400/month

Council tax: £175/month

Utilities: £150/month

Home insurance: £15/month

Schooling: £0

Total (more or less): £1,705/month or R31,000

Fourways:

3 bed, detached house in a secure complex, with garden, garage and driveway.  Decent area, good schools nearby.  Actually, also a lovely property, check it out here.

Rent: R17,500/month

Utilities: R1,800/month (this is approximate as I couldn’t find up to date info online)

Household insurance (with armed response): R850/month

School fees: R3,500/month (per child, approx. costs for state schools)

Total (more or less): R23,650/month or £1330

These are based on averages found online for these particular areas. 

Now let’s talk earnings – can I afford to live in the UK on an “average” salary or is living in SA really cheaper for me?

According to annual research, working in Reading at my age and with my experience/skills, I can expect to earn an average of £2,400/month (R42,700/month).   

Using the same measure, in Fourways or Sandton, I can expect to earn an average of R24,000/month (£1,350/month).

So let’s compare these VERY basic calculations in a table just because it’s easier to compute in my writer's brain.  I’ve kept each country in it’s own currency for obvious reasons, with a conversion right at the end.

Description	UK	SA
Groceries – monthly	£230.88	R4,410.48
Rent	£1,400	R17,500
Council tax	£175	-
Utilities	£150	R1,800
Home insurance	£15	R850
School fees	-	R3,500
Totals	£1,970.88	R28,060.48
Ave monthly earnings (gross)	£2,400 (R42,650)	R24,000 (£1,350)
Less expenses	£429.12 (R7,626.37)	-R4,060.48 (-£228.47)

As you can see…in South Africa, life may be cheaper on paper but in reality it’s not, once you consider the average earnings.  Based on the table above, I would be in huge trouble, battling to survive and those figures are before any deductions for tax, medical aid, pension and even transport. I haven’t taken into consideration the second income in the house either or private schooling which are other factors to consider if you want a full comparison. 

You can recalculate this easily for a cheaper lifestyle in both countries, or a more expensive one – I was trying to compare apples with apples, I’m not a financial modeller but you get the point I’m trying to make.  

So when someone shares with you how “cheap” SA is or how pricy the UK is, consider first and foremost earning capacity in each country.  

And right there, is the real test – can you afford to actually live in SA?