A cost of living comparison prices a fixed basket of goods and services in two places, or at two times. The answer depends on whose basket it is. Change the household and the same prices give a different figure.

Investopedia describes the measure as the money a consumer needs for an average lifestyle. That covers food, shelter, clothing, healthcare, education, fuel and other goods and services.

Rows of nested metal supermarket trolleys lined up outside a shop.
Image: zeevveez more
Supermarket trolleys, the basis of most price baskets.Licence: CC BY 2.0

The same year, a different rate for each household

The UK’s Office for National Statistics shows how far the basket matters. Its Household Costs Index rose by 2.8% in the year to June 2026. The Consumer Prices Index rose by 2.6% over the same year.

Split the households and the figure moves again. Private renters faced the highest rate, at 3.0%. Outright owner-occupiers faced the lowest, at 2.6%. Non-retired households saw 2.9%, against 2.5% for retired ones.

The reason is weighting. The CPI weights each item by its share of all UK household spending, so bigger spenders count for more. The household indices give each household’s spending pattern an equal say instead. They also count mortgage interest and stamp duty, which the CPI leaves out.

The ONS labels these figures official statistics in development, and warns they may be revised.

Across a border, the basket changes too

Comparing two countries adds a second problem. Investopedia, drawing on Numbeo’s figures, puts the cost of living in the UK 5.9% below the US. Local purchasing power runs 18.6% higher in the US.

A national average hides most of the story. The US is about 40 times the size of the UK, and Investopedia notes that Mississippi costs less to live in than Connecticut.

The line items pull in opposite directions. UK groceries come out about 13.5% cheaper and rent 17.8% cheaper. A gallon of petrol cost $7.63 in the UK against $4.22 in the US. Utilities for a 915 square foot flat cost 50.6% more in the UK.

Read the figure, then read the basket

Even one source can disagree with itself. Investopedia’s page gives London rents as 30.5% below New York’s in one place and 32.4% below in another. It puts London’s average take-home pay 14.8% below New York’s, then 21.9% below.

The ONS publishes its next household costs release on November 27, 2026. Before trusting any single cost of living number, find out which households it describes and which month its prices come from.