UK and Ireland rank bottom in Quality of Life Index

The UK and Ireland have been ranked as the worst European countries to live in, according to the uSwitch.com Quality of Life Index. The findings pile on the misery faced by consumers in the wake of recent warnings by the British Chambers of Commerce of a pending recession in the UK. The news that the Consumer Price Index (CPI) is running at an 11 year high of 3.3%, coupled with the recent warning that the price of goods is climbing faster than at any time in the past 22 years and outstripping the growth in most people's salaries, will do little to move the UK ahead in the rankings for some time.

Inflation-busting prices for fuel and other essential goods, below average government spending on health and education, short holidays and late retirement have kept the UK firmly at the bottom of the list - below countries including Spain, France, Germany and even Poland. Spain took the top spot despite families earning an annual net income of only £16,789 - £8,500 below the average and less than half that of the UK.

Overall, Spain fares well in most categories, with low taxation and cheaper essential goods such as petrol, energy and food. The quality of life in Spain is boosted further by higher than average life expectancy, the most hours of sunshine and a generous holiday allowance. France came second in the index, boasting the second highest spend on healthcare and faring better than most when it comes to the cost of goods, taxes, hours of sunshine and the highest holiday entitlement in Europe (40 days).

The uSwitch.com study closely examined 19 factors in order to understand where the UK sits in relation to nine other major countries across Europe. Variables such as net income, taxes and the cost of essential goods (such as fuel, energy bills and food) were examined alongside lifestyle factors (hours of sunshine, holiday entitlement, working hours and life expectancy) to provide a complete picture of the quality of life experienced in each country.

Mervyn King, Governor of the Bank of England, warned consumers last month to brace themselves for ‘the most difficult economic conditions in two decades'. He blamed the sharp increase in inflation from 2.1% in December to 3.3% in May on the increased cost of food, fuel, gas and electricity, which alone ‘account for 1.1 percentage points of the 1.2 percentage points increase in the CPI inflation rate since last December.'

Petrol

Between 2006 and 2008 alone, the cost of diesel in the UK has increased by 38%. The UK is now the most expensive place to buy diesel at £1.32 per litre, 20p more than the European average. Worse still, the Institute for Advanced Motorists (IAM) has warned that prices could rise a further 20p a litre within a matter of weeks. This comes in stark contrast to the price paid by the Spanish, who currently get the most mileage for their money paying only £1.00 per litre.

Energy

Gas and electricity prices continue to dominate the news agenda in Britain with senior energy industry insiders predicting further price rises of up to 40% this year. This would bring the average household energy bill up to a crippling £1,467, a potential total increase of 61% or £555 in a year.

Meanwhile, the Spanish government is set to unveil a "Plan Save" energy initiative which will aim to cut energy use by 10% over two years to reduce Spain's dependence on imported energy and soaring world prices. The cuts are expected to save five billion euros and should benefit the housing, retail and transport sectors. As it stands, gas bills in Spain are already substantially below the European average and are the second lowest in Europe. Ireland pays out the most for gas with the average annual bill coming in at £552, £279 above the European average.

In Poland, the move to cut the CO2 quota could lead to a 4% rise in electricity prices, potentially jeopardising their top spot as the country that spends the least to keep the lights on. Poles currently pay an average annual electricity bill of £154 which falls £307 below the European average of £461. The Swedes, however, rely heavily on electricity rather than gas and spend £860.46 each year which is double the average.

Food

It's no secret that food prices are rocketing in the UK having increased by 12.6% over the past year - the fastest increase since the 1970s. However, it appears the Danes are still paying the most for a shopping basket of essential food goods. The index considered items including cereals, meat, fish, dairy products, fruit, vegetables and sugar. Against a European average price of £135 for a basket of staple products, the same items in Denmark amounted to £163.22, while in the Netherlands would cost just £114.10. Brits could expect to pay £125 for the same basket.

The standard of living across Europe

Last month saw the 60th anniversary of the NHS but the UK has little to celebrate with the study revealing that the Government spends just 8.1% of GDP on healthcare. The Director of Policy at the NHS Confederation concluded earlier this month that we have been ill provided for when it comes to healthcare claiming that ‘some Governments did not invest enough.'It's our German counterparts who spend the most on healthcare at 10.6% of GDP, while the Polish spend a meagre 6.2%, 2.4% below the European average (8.6%).

The British also get the short straw when it comes to holiday allowance. Workers in the UK typically only enjoy 28 days a year (including bank holidays) compared to the French, who receive an average of 40 days, well above the European average of 33. The Poles work the most hours per week (41 compared to an average of 37) but enjoy nearly two weeks more holiday than workers in the UK.

Any notion that lower holiday entitlements are a trade off for early retirement is dispelled for people living in the UK. Burgeoning costs of living mean that we are retiring later than ever with the average person now retiring at 63, over four years later than the French and only superseded by Ireland.

Even if British workers were afforded extra holiday entitlement, they would have to go elsewhere to enjoy some time in the sun. The Met Office predicts that ‘although last July was one of the wettest ever recorded, this July could even equal or surpass it,' so it comes as no surprise that the number of hours of sunshine enjoyed in the UK is 17% below the European average. As one of the most popular holiday destinations in Europe, Spain gets the most sunshine with 50% more hours than the average across Europe and 80% more than the UK. In the end, the Irish suffer from the worst of the weather as the sun shines in Ireland for an equivalent of only 58 days of the year, 16 days less than the European average.

Big cities, big prices

While property prices may be falling, anyone living in London can attest that the cost of housing in the city is astronomical with the price per square metre of property coming in at a whopping £9,902. This means that a 120 square metre apartment would set someone back as much as £1,188,240 if bought in London. Paris, the second most expensive city for property, comes in at £833,631 for an apartment of the same size. At the other end of the spectrum, the size property costs just £216,579 in Berlin and £233,721 in Dublin.

Ann Robinson, Director of Consumer Policy at uSwitch.com, says: "We may earn substantially more than our European neighbours but, when it comes to quality of life, we remain the ‘sick man of Europe'. Soaring food prices and inflation - not to mention high property costs - are placing the biggest squeeze on disposable incomes in well over a decade. With below average investment in health and education, it appears that we are getting a raw deal from the government for the fruits of our labour.

"With the global economy stuck between a rock and a hard place the Bank of England has already warned consumers to brace themselves for the most difficult economic conditions in two decades. British households are facing huge financial pressure as take home pay stagnates, inflation continues to rise, and economic growth and house prices fall.

"The UK is not a pretty picture but consumers can help themselves by evaluating their household expenditure to see where they can make savings. There are positive signs that consumers are already cutting back, curtailing spending and trying to clear outstanding debt. As long as we take hold of the reins on our household budgets, we can influence our standard of living and improve our overall quality of life."