Methodology — How we calculate UK cost of living

Every number we show is built from public UK data and clearly stated assumptions. Here's exactly what the tool does, where the figures come from, and how the Reality Score is produced.

1. Overview

Reality Cost is a free UK cost-of-living calculator. You tell us your salary, city, household and lifestyle; we estimate what's actually left after tax and the typical cost of living in that city.

The headline result is your Reality Score — a 0–100 rating of how comfortably your salary supports your chosen lifestyle — alongside a monthly breakdown of take-home pay, fixed costs and disposable income. Results are designed to be directional and comparable across cities, not a personal financial plan.

2. Data sources

The calculator combines four kinds of inputs:

Taxes — UK government thresholds. Income Tax and National Insurance use current HMRC bands for England, Wales and Northern Ireland, including the personal-allowance taper above £100,000 and the Class 1 NI primary threshold.
Rent — city benchmarks. City-level rent figures come from ONS Private Rental Market statistics and large property-portal medians, adjusted for household size (single, couple, family). We use medians rather than means so a handful of luxury listings don't distort the figure.
Utilities — averages. Energy follows the latest Ofgem default tariff cap for a medium-usage household. Council tax uses the typical Band C/D charge for the local authority. Broadband, mobile, water and TV licence use national averages that update with each regulator review.
Groceries and leisure — estimated ranges. Grocery spend is based on ONS Family Spending data for your household size, with a small regional adjustment. Leisure (eating out, hobbies, subscriptions) is modelled across four lifestyle tiers — Basic, Moderate, Comfortable and Premium — anchored to typical UK spend.

Every city baseline carries a last-reviewed date and a confidence rating (High, Medium, Low) so you can see at a glance how fresh and well-sourced the underlying data is.

3. How results are calculated

The pipeline is intentionally simple:

Income after tax. Your gross salary is run through HMRC's Income Tax bands and Class 1 National Insurance to produce a monthly take-home figure.
Monthly cost estimates. We add up rent (or your chosen housing cost), council tax, utilities, broadband, groceries, transport and lifestyle spend for your city and household.
Disposable income. Take-home pay minus monthly costs. This is what's left for savings, debt repayment, holidays or anything else not captured above.
Affordability score. Disposable income is compared to a healthy benchmark for your household, then mapped to a 0–100 Reality Score. Above 70 is comfortable, 40–70 is stable, below 40 is tight.

4. What is estimated

Tax and National Insurance are calculated exactly. Rent, utilities and council tax are city-level benchmarks rather than your specific address. Some lifestyle costs are estimated based on typical UK spending patterns — particularly groceries, leisure and transport — and will differ from your actual bank statements.

We deliberately exclude things that vary too widely person-to-person to model honestly without more inputs: personal debt repayments, childcare, private school fees, and pension contributions above the auto-enrolment minimum. The figure we show is the cost of living in your city, not a full personal budget.

5. Disclaimer

Results are indicative and should not be considered financial advice. Reality Cost is a planning and comparison tool — use it to explore scenarios, not to make binding financial decisions. For advice tailored to your circumstances, speak to a qualified financial adviser.

Updates and corrections