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Gross miscalculation of the cost of relocation

Article by: HCR | Published: 14 September 2017

Making the decision to relocate for work is a literal life-changer. If you’re being moved by an employer this takes away the pressure of finding work in your destination town or country, but the disruption for you, and your family, is still all-encompassing. Article from HCR.

Relocating the family – and remapping their lives – can take an awful lot of planning to give you all the best chance of a smooth transition. Take schools, houses, neighbourhoods, medical care, even the moving-in logistics out of the equation for a second. If you’re moving country have you considered how you and your family will adapt to a new rate of pay and different standard of living? Are you expecting a larger relative income? Is this realistic? And how will your partner or spouse go about juggling their own career change if the move isn’t entirely on their terms?

Moving home for a job can be a real eye-opener. Of course, you don’t have to deal with the uncertainty of employment search; you have a ready-made circle of acquaintances in the workplace and a strong foundation from which to establish yourself in your new community. But without these factors to preoccupy, you will notice the subtle, yet fundamental differences that come with moving to another country – even if the locals speak the same language. If you move country chasing a dream lifestyle or salary or follow friends or family for a piece of their idyllic new world, the situation would be exactly the same. And again for people who are upping sticks to move here to the UK in pursuit of a new life. Yes, to us living in Britain, employment law and living conditions are clear-cut and familiar; they make sense. But for someone new to the UK, the cost of living and relative salary could be a real eye-opener and force a whole new way of life for them.

Entering the job market in the UK as a migrant can be a minefield but you are entitled to earn at least the national minimum wage, protected by UK employment laws and entitled to all related work benefits including annual leave and statutory sick pay. And you must pay tax and national insurance. There are many tiers of UK work visa available including entrepreneur, exceptional talent, sports person, intra-company, investor, general, priority service, temporary worker and UK ancestry, so see where your skills lay and plot the most relevant route to work here ideally before you arrive.

UK living
For families leaving the UK for work, they also leave behind a number of services and entitlements they have always known, and probably take for granted. Employees in the UK are entitled to at least 28 days’ paid holiday as a statutory right, even if the terms of their contract state lower. Workers have the right to earn at least the national living wage. So regardless of the job, you can expect to be paid a minimum £7.20 per hour (this figure is revisited each April) if you’re over 25 (minimum wage rates are also in place for under 25s, under 18s and apprenticeships). There are other entitlements too like the right to apply for flexible working, for paid sick leave, for paid antenatal care, maternity, paternity and adoption care. UK health and safety law imposes the right for people to work a maximum 48-hour week, to not be discriminated against in the workplace and to have the option to work until at least the age of 65. And then there are pensions. Automatic enrolment is now compulsory in the UK.

Looking at Gross Domestic Product (GDP), a standard measure of living conditions and prosperity, the UK currently ranks in the world’s top ten. This figure takes into account factors like employment figures, population, government wealth, debt and natural resources. But some destination countries won’t offer anywhere near this standard of living. Some will outshine the United Kingdom in terms of GDP but workers’ rights may not be so well established, while other countries may be poorer, with no minimum wage but treat workers in the highest acclaim with a high standard of living.

Costliest countries
If you’re upping sticks from the UK, it (literally) pays to do your homework on your prospective living conditions and quality of life before you’re there. To accept a relocation package, the salary or the role must have been an adequate temptation, but what can seem like a handsome salary in the UK might not stretch too far when considering how much further it may have to go in your new home. From medical fees in countries like the United States to over-inflated fuel prices in Norway, Turkey, even the Netherlands. Residential electricity prices across Europe alone vary widely, with London actually one of the cheaper capitals compared to Berlin, Prague, Lisbon and Bucharest. And again gas prices will seem a shock in Stockholm, Lisbon and Belgrade, each capital sitting well above the average gas price bracket with London actually Europe’s second cheapest.

Combine this with property prices, food bills, taxes and your solid salary offer that would have promised big opportunities in the UK cushioned by all the home comforts could look very different depending on your destination. In 2014 the Economist Intelligence Unit’s 2014 Worldwide Cost of Living survey listed the world’s 130 most expensive cities based on more than 400 cost indicators including the basic price of groceries, heating, transport costs and clothing. Singapore tops the list, followed by Paris, Oslo, Zurich and Sydney making up the top five. All of the world’s continents are represented in this top 130 but Europe, Asia and Australasia make up the top 10. The Middle East and Asian Subcontinent were found to be the most affordable globally but then the majority of salaries would reflect this fact.

Comfort at what cost?
So you’ve done your sums and are considering packing up for your new life abroad. But if your partner wants a good chance of continuing their own career there is even more to think about. The family’s initial move, living circumstances and your own employment have all been considered but in some countries, Australia being a case in point, America being another, they may need to take eligibility tests, get a visa, or pursue a new qualification just to pick up where they leave off. There may also be language requirements to be met. For example, a teacher, medical professional or lawyer wishing to practise in Canada would need to be regulated when they get there. And while America states an average 8-hour working day / 40-hour week, working days are often much longer. Plus, the standard holiday allowance in these two countries is a paltry nine days (compared to 28 here), rising to three weeks through length of service.

In conclusion, it’s a big risk to take an international job offer at face value. While it’s an incredible opportunity and a great prospect you need to measure the offered role and all its associated trappings in the context of the destination country. If the cost of living is less than or similar to the UK, you fancy a change of scene, of life or of pace or career advancement is your main priority then relocating with the support of an employer makes this hurdle a little easier. Do your research, do the sums and if it still looks like an opportunity worth relocating for, you’ll be making a well-considered move. By taking any surprises out of your future cost of living you can concentrate on settling into your new life and make sure it proves to be the right choice for the whole family.

www.hcr.co.uk