An official view of why Spain is the best
Britain may be the hardest working and wealthiest nation in Europe, but our standard of living is "mediocre", says Jill Insley in The Observer. According to a survey for The Marketplace, an independent advisory arm of Bradford & Bingley, we pay more tax than our European neighbours, and the high cost of living here wipes out most of the advantages of earning the highest gross annual income. So is it time to move abroad? Here's how Britain compares with France, Italy, Germany and Spain:
Work
Britons average some 2,000 hours of paid work per employee each year, while the Spanish work 1,842, the Germans 1,831, the French 1,773 and the Italians 1,751. We have the longest working day (8hrs 42mins compared with Italy's 7hrs 42mins) and the longest working year (240 days), and we take ten days less holiday than the Germans, 12 days less than the Italians, 13 days less than the Spanish and "a staggering" three working weeks less than the French.
Income
Our higher household income, at £35,917, should compensate ‑ in Spain the average is £27,366 and Italy it is £24,111 ‑ but after tax we are left with just £24,407. This is still higher than the other four countries after tax, but our advantage is whittled away by higher prices. In 2000, prices were 7% lower in France, 8% lower in Germany; 23% lower in Italy and 26% lower in Spain, according to the OECD; the European Commission found that £1 would be worth 2p more in Germany, 4p more in France, 19p in Italy and 22p in Spain. The worst place to live is London. It is Europe's most expensive capital and 32% more expensive than Paris, the nearest contender. All this leaves Spanish families effectively £2,000 better off a year.
Houses
The British are not, contrary to popular belief, the keenest house owners in Europe. With 70%, of properties owner occupied, we draw with Italy, but we lag behind Spain at 80%. Property also costs us more; a typical family home in England or Wales costs £119,000 compared with £65,000 in Italy, £60,000 in France and £54,000 in Spain. Only Germany's houses are more expensive at £152,000. But we also get less for our money ‑ the average UK home has 76 sq m of useable floor space compared with 85 sq m in Spain, 87 in Germany, 88 in France and 92 in Italy. Our average debt ‑ £53,950 per family is greater too. In Italy it is just £9,326.
Spending and Saving
We spend almost as hard as we work. Almost 13% of the average UK household's disposable income is spent on leisure products and services and a further 7.5% goes on eating out and hotels ‑ more than any other country. Yet we save just 5% The French put aside most, saving 16%.
Debt
We have the biggest debts, mainly because of our mortgages. Total debt is 7% higher than the average German family and 93% more than the French. Personal loans are larger, too ‑ over £6,000 compared to under £4,500 elsewhere.
Pensions
UK state pensions are by far the lowest. A 1995 study by the IMF found that while French pensioners could expect an average pension worth 60% of their final gross pay, in Britain the average is only 18%. These figures may be five years old, but the position has worsened since. At least we have gained some ground by saving into private pensions: UK families have an average of £45,541 in pension assets; Spanish families have just £1,432.
Household wealth
We may save the least, but our "aggressive attitude to investing" ‑ we put 75% of our pension funds in shares, compared to just 2% in Italy ‑ has paid off. British families are the richest with an average wealth of;£191,000, fairly equally divided between property and financial products. French households are second with £146,000, while the Spanish come last with £79,000.
So who is really best off? We may be the richest, but we can't access that wealth unless we are prepared to trade down to a smaller home or are old enough to start drawing a pension. France is a strong contender with the second highest disposable income, lower taxes and cheaper property, but prices are only 7% lower than ours, so the real advantage is lost. The winner is Spain. They may earn little and save little, but low prices give them the edge. And with 46 days holiday a year, they can make the most of it.
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06/03/2006