The Source: The Guardian

The UK’s standard of living has climbed to the joint fourth-highest within the European Union, overtaking the Netherlands and significantly ahead of France, Italy and Spain, according to official figures compiled by Eurostat, the statistical office of the EU.

Luxembourg, currently mired in controversy over “industrial level” tax avoidance, easily topped the table of living standards, as measured by “actual individual consumption”. AIC incorporates all goods and services that a household consumes, including benefits-in-kind, such as health and education services.

The UK’s standard of living in 2013 was 15% higher than the average for the 28 member states of the EU, and was up one place from the year before. Luxembourg came top (36% higher than average) followed by Germany (22%) and Austria (20%). Four nations, Denmark, Sweden, Finland and the UK were then jointly ranked in fourth place.

Bulgaria is the country with the lowest living standards in the EU, at just 49% of the average, followed by Romania. Both countries have a lower standard of living than the average for Turkey, Eurostat said. Countries which have seen their relative standard of living fall most include Greece, Ireland, Cyprus, Italy and the Netherlands, while the biggest risers have been Poland, Estonia and Latvia.


But two of the richest countries in Europe are not EU members. Norway and Switzerland came just below Luxembourg, but significantly ahead of Germany. Iceland, despite suffering an economic meltdown when its banks collapsed during the financial crisis, still enjoys a consumption level above nearly every other country in Europe.

Eurostat also compared relative price levels, naming Denmark as Europe’s most expensive country with prices 42% above the EU28 average. Prices paid by UK households were sixth highest in the EU in 2013 (tied with Belgium and the Netherlands), unchanged from 2012. Prices in the UK were 14% above the EU28 average, while prices in Bulgaria were lowest.

The figures reveal some wide gaps between GDP per capita and individual consumption. For example, Ireland has a GDP per capita of 130% of the EU average, but its AIC score placed it on a par with Cyprus, where GDP per head is just 89% of the EU level.

The UK’s GDP per capita was 109% of the EU average, compared with 257% in Luxembourg and 122% in Germany. A Treasury spokesperson said the Eurostat figures were evidence that “the government’s long-term economic pan is working.” The spokesperson added: “But the job is not done and so the government will go on taking the difficult decisions needed to secure a responsible recovery and stay on course to prosperity.”

This article was amended on 11 December 2014. It originally said that Bulgaria was the country with the lowest living standards in the UK.