Tuesday, 21 September 2010 11:59PM
UK worst place to live in Europe: Quality of Life Index
The UK and Ireland are the worst places to live in Europe, while France and Spain are the best, according to the latest uSwitch Quality of Life Index
The UK came 9th out of the 10 European countries in the Index, thanks to high living costs, below average government spending on health and education, short holidays and late retirement. The Index shows that people in France enjoy the highest quality of life, closely followed by Spain.
People in the UK pay the highest prices for food and diesel, yet the government spends below the European average (as a percentage of GDP) on health and education. We also work longer hours, retire later, receive less annual leave than most of our European counterparts and get less sunshine along the way - not to mention the fact that we can expect to die two years younger than our French counterparts.
The UK no longer has the highest net household income in Europe, after falling behind Ireland, the Netherlands and Denmark. In the past, the relatively high net income in the UK has offset the poor quality of life, but this year net household income it is only around £5000 above the European average, compared to £10,000 above last year.
France enjoys the earliest retirement age (joint with Poland), spends the most on healthcare (11% of GDP) and has the longest life expectancy in Europe. Its workers also benefit from 36 days holiday a year, compared with just 28 in the UK, and it comes only behind Spain and Italy for hours of sunshine.
Spain has the most sunshine, the lowest prices for alcohol and the highest number of days holiday in Europe at 43 days a year. However, the Spanish government spends the least on education.
The UK's investment in health and education - or lack thereof - had a significant impact on its score in the Quality of Life Index. The UK spends just 8.2% of GDP on health, compared to a European average of 9% - only Poland spends less (just 6.2% of GDP). The government's spending on education is also below average at just 5.5% of GDP, compared to 7% in Sweden.
But, with the British government looking for ways to make cuts ahead of its Spending Review on 20th October, things could get worse before they get better. So far, the NHS has been excluded from the review, but more than £300 million has already been shaved off the education budget.
Lack of investment into health and education could well be a contributing factor to the UK's lower than average life expectancy - evidence suggests that who are better educated live longer and are healthier.
The Quality of Life Index shows that the average net household income in the UK of £37,172 is still above the European average.
This extra income is needed - people living in the UK also have to contend with a high cost of living. The average household energy bill is £1,195 a year, we pay the highest prices in Europe for food and diesel, and non-essential items like alcohol and cigarettes are also more expensive than elsewhere in Europe. A British smoker can expect to pay around £6.30 for a packet of cigarettes, while somebody in Poland will pay just £1.70 per pack.
A separate study by uSwitch found that British consumers are feeling the pinch with nine million (18%) using debt to fund their living costs and seven million (14%) struggling to meet existing repayments. Looking ahead to the next six months, six million consumers (13%) say they will struggle to pay household bills on time and four million (8%) may have to default on credit repayments. The situation is not helped by 49% of consumers experiencing a pay freeze, UK unemployment hitting its highest level since December 1994 and wide public sector job losses expected as the new government cuts spending.
As it stands, people in the UK can expect to work four years longer and die two years younger than their French counterparts. While workers in the UK are entitled to 28 days holiday a year, the Spanish enjoy 43 days off a year, plus almost double the hours of sunshine with which to enjoy them. Sadly for UK workers, over a lifetime of work (45 years) they will get just over three years off as holiday, while their Spanish equivalents will enjoy over 5 years off and get to retire earlier too.
Ann Robinson, Director of Consumer Policy at uSwitch commented on the findings: "Last year compared with our European neighbours we were miserable but rich, this year we're miserable and poor. Whereas some countries work to live, UK consumers live to work. In fact we work harder, take less holiday and retire later than most of our European counterparts - but the high cost of living makes this a necessity rather than a choice. With salaries failing to keep up with inflation, it's likely that we're a long way from achieving the quality of life that people in other countries enjoy.
"The picture looks bleak for British consumers with confidence crumbling as the reality of the government's deficit reduction starts to bite. Uncertainty over jobs, interest rates and taxes has left nearly half of consumers (45%) concerned about their finances and more than 24 million (49%) feeling worse off than ever before. Perhaps unsurprisingly given how life in the UK compares, three in ten people (30%) believe that now is a good time to emigrate.
"But for those of us who decide to stick it out and ride the storm, there will be no choice but to batten down the hatches. There are positive signs that consumers are already cutting back, curtailing spending and trying to clear outstanding debt, but more could be done. Taking control of our household finances may be the only way we can steer through these turbulent times until we reach a point where we can start to see our quality of life improve."
The uSwitch.com study examined 16 factors to understand where the UK sits in relation to nine other major European countries. Variables such as net income, VAT and the cost of essential goods, such as fuel, food and energy bills, were examined along with lifestyle factors, such as hours of sunshine, holiday entitlement, working hours and life expectancy to provide a complete picture of the quality of life experienced in each country.
Quality of Life Index research was conducted by Research Insight in August 2010 with further analysis conducted by uSwitch.com based on the following standardisation methodology: A standardised score for each variable across each country was calculated based on the following: Standardised score = (raw score - average)/standard deviation. For example, average net income across all countries is £34,858.20 and the standard deviation (average distance from the mean) was £6,513.02. Net income in Denmark is £39,997. Standardised score = (39,997 - 34,858.20)/ 6,513.02= 0.79. As this represents the distance between the raw score and the average, when the standardised score is negative, the raw score falls below the mean, and when positive, the score falls above. Overall Quality of Life is defined as the sum of the standardised scores.
Net income after taxes (in GBP) from OECD - based on two-earner married couple, one at 100% of average earnings and the other at 33%, 2 children.
Standard VAT rates come from Eurostat.
Average working hours info from OECD
Average exit age from the labour market - stats from Eurostat.
Holiday entitlements are a sum of statutory minimum holidays and public holidays in days per year. Source: Mercer Human Resource Consulting, Eurostat, Federation of European Employers
Figures for health and education spending come from Pocket World of Figures 2010 edition - The Economist
Unleaded petrol costs in GBP per litre - Eurostat - average cost for first half of 2010
Unleaded diesel costs in GBP per litre - Eurostat - average cost for first half of 2010
Average national price without tax for first half of 2009 for medium size household - stats from Eurostat.
Average national price without tax for first half of 2009 for medium size household - stats from Eurostat
Alcohol prices - harmonised consumer prices for alcoholic beverages. Includes wine and beer - stats from Eurostat
Food prices - harmonised consumer prices based on the following basket of food: cereals, meat (total), fish and seafood, milk, cheese, eggs, fats and oils, fruit, vegetables, sugar, jam, honey, chocolate and confectionary, food products - stats from Eurostat.
Life expectancy - stats from CIA World Factbook 2010