Friday 17 October 2014

Expensive expensive Norway.... Or is it?

If you mention 'Norway' to somebody, chances are they will say "oh, but isn't it so expensive there?". And the short answer is... Kind of. Norway is extremely expensive for some things, cheap for others, and if you earn a Norwegian salary you're laughing. The cost of living in Norway was the main thing that scared me from taking the leap over here- I was terrified that I would burn through my savings in a matter of weeks. But despite the rumours, I have discovered that with a few simple tricks, things can be quite manageable.....

Salary and Taxes

First things first. Every country's cost of living needs to be compared to the average salary in the country, in order to assess typical disposable income, and typical quality of life. Norway is an expensive country compared to others if you directly compare the prices of certain things. However, average wages are proportionally much higher. To give an example, the average yearly salary of somebody in the UK is (gross) £26,500. The average yearly salary in Norway is £39,000.

"Oh but.." I hear you say "So much of that goes on taxes right? So it doesn't really count".

I'm really uncertain about where this myth of high taxes in Norway comes from. It is an opinion held by both Norwegians and foreigners! I think it must be because people compare the income tax in England with the total taxes on income in Norway, ignoring what is taken away with National Insurance. I took a look at a a UK tax calculator as well as a a tax calculator from the Norwegian Skatteetaten, and the results were pretty incredible!

If you take each of the country's average salaries as an example, a salary of £26,500 would bring £20,974 after taxes in the UK. In Norway, you would take home £20,609. For £39,000, in the UK you would be left with £29,474, and in Norway £28,635 (both are almost identical!)

And consider that £39,000 is the average salary here, and what you get for your taxes! (It's no wonder the Norwegian word for tax skatt also means treasure.) Free university education for everyone for up to 7 years, a crazy student loan (half of which is given to you as a gift if you pass your exams), generous pensions, clean and safe cities some of the best (free) healthcare in the world (apart from, my one bone of contention, you have to pay £20 here for a doctor's appointment, and women must pay for contraception. Even IRAN has free contraception. Step it up Norway.)

But for my part, it only took me two weeks to find a job here where all I needed was to speak English. The average salary for child sitting// dogsitting/ tutoring is from £12- £18 an hour. I'm now breaking even/ saving money each month, and as a foreigner I get a 10% tax discount for my first 2 years of working in Norway!

Housing and Transport

These are the two things that I found to be surprisingly cheap in Norway, at least compared to London. They are also the two things that take up the greatest proportion of your monthly spending. Norway is a very large country, with a very small population. There are 5 million people in the whole country- compared to 8 million people who live in London! Unsurprisingly then, land and houses are cheaper than in England. Student accommodation in Oslo can be found for about £300 a month including all the bills, whilst private houses can be had for £500 a month in fairly good locations. Compared to London, where people pay anything between £500 to £800 a month for a place , I think that's pretty damn reasonable considering the average salary.

Transport as well in Oslo is excellent value. If you buy a monthly pass (a point which can be debated, see the other post!) you can except to pay £39 a month as a student and £70 a month as an adult for access to all transport systems in main Oslo, from the mountains to the fjords to the ferries across to the islands around Oslo. Compared to £120 a month for a zone 1 and 2 travelcard in London- not too shabby!

Food and Drink

Okay, here is where Norway really earns its expensive reputation- and it's no wonder really because reputation and stereotypes of a country are typically bred from tourists travelling there, and the one thing tourists do alot of on holiday is eat and drink. A main course in a nice restaurant here will cost you about £20. A pint of beer will be about £7 or £8. Food and drink in the shops are similarly stepped up, around about £2.50 for a pack of gum or a chocolate bar, £2 for a litre of milk, £3 for a loaf of bread (I feel giddy when I go home and enter Asda or Tesco- it's enough to consider whether it's worth paying for checked luggage and filling it with food!!)

Although there are tricks here as well. Oslo has an area called Grønland which has a large immigrant population, and some very cheap international supermarkets and fruit and vegetable stalls. There is shop which people genuinely travel across Oslo to visit; filled to the brim of the very freshest fruit and veg (and filled to the brim with people!) I stop there about once a week and spend about £10 for all of my fruit and veg for the week, which as a vegetarian is quite alot!

One other thing to bear in mind is that whilst the bill for food in supermarkets is appalling when compared to the UK, Norwegians apparently only spend about 10% of their salary on food and soft drinks (beer is another story ;) ). I'm not entirely sure what the statistic here is compared to the UK- but perhaps people could work it out? 10% seems really reasonable to me!



And I have to say the one good thing about living in a place that is so expensive is travelling home and on holiday and finding everything so cheap! Drinks on me.....


2 comments:

  1. Really interesting Clare :) It seems the cost of rent and transport is almost identical to in Edinburgh. I'm not really sure London is fair comparison to any other city in the world in terms of cost as it far outstrips pretty much anywhere....I imagine if you compared Oslo with Newcastle it would seem extortionate. When I was in Copenhagen and Malmö recently, I was able to justify the high prices to myself by remembering I would pay the same, if not more in London :p
    I'm wondering what the income tax bands are in Norway? Are they more progressive than here? Also, I've heard that the cost of living across Norway doesn't vary all that much, or at least not nearly to the extent it does in the UK. Do you know if that is true?

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  2. Thanks Jenny :)

    Yes.... any comparison to London is rather unfair as London is just ridiculous these days! I guess I had to use London as it's the only city I really have experience of living in, and the majority of my friends live and work there :) But then again, I do think comparing Oslo and London is rather fair, as they are the two capital cities. Alot of Norwegians complain about the prices of housing and goods in Oslo, in the same way we would about London. Comparing, say, Newcastle and Trondheim would be fairer.

    Apparently the cost of living in terms of food and beer in a restaurant, or food in a supermarket, doesn't really vary too much in Norway. Some things cost more in some places than others (eg: fresh fruit and vegetables in the North), however there is a huge variance is prices of apartments and rent for instance. Also in Trondheim and other smaller cities, it is easier to get around as everything is closer, so transport is cheaper and more people walk or cycle.

    With taxation, they don't have such a large personal allowance (we have £10,000 tax free in the UK, they have only about £4500 before they have to pay national insurance, and then it's about £8000 before they have to pay income tax, although if you are a single parent or in a difficult living situation you can get more allowance). They have alot of deductions that can be taken in for almost every scenario (interest rates on loans, mortgages etc...), and then people get taxed 27% on anything above their personal allowance. If you earn more than about £50,000 you pay 36% tax. If you earn more than £80,000 you pay about 39% tax (but in addition to all these numbers you have national insurance which is 8.2%). So.... I'm not really sure! It seems like quite a complicated system, but they seem very good with their tax free deductions. If you have children it seems you can deduct everything you spend on your kids on your salary, so you pay alot less tax! And the key in Norway is that salaries are all about the same really, there is not such a huge gap between the lowest and highest earners.

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