The UK ranks fifth when it comes to the highest minimum wage in Europe but has among the highest costs of living on the continent.
While minimum wage increases every year in the UK, it still does not keep up with the soaring cost of living in a country where around 14.4 million people were living in poverty in 2021-2022, according to the Government’s official statistics.
Luxembourg provides the highest monthly minimum wage in Europe at £2,178 a month, according to a comparison by Eurostat. Germany was second with £1,734, then the Netherlands with £1,732, and Belgium with £1,698, followed by the UK, where minimum wage is £1,667 (£10.42 per hour).
However, estimated monthly costs without rent for a single person living in London are £1,104, according to data compiled by comparison website Numbeo, which provides crowd-sourced data for cities around the world.
This means a person on minimum wage in London will spend roughly two-thirds of it on living costs such as food, transport and utilities – even before paying rent, with the average room in London reaching £971 per month in July.
Luxembourg, the world’s richest country which has a thriving financial services sector, not only ranked highest for minimum wage but also had one of the lowest costs of living of the seven countries, with £830 being the monthly cost for a person living in the small country’s capital city, which shares its name.
Germany was the next best with £1,734 as the minimum monthly wage and £883 as a monthly cost for someone living in Berlin.
The statutory minimum in Germany was increased to €12 (£10.41) per hour last year — a rise of nearly 15 per cent, affecting more than six million low-paid workers.
In Amsterdam, the cost of living was just over £830 a month, the same as Luxembourg, but minimum wage was considerably lower at £1,732. In Belgium, the cost of living was a little more than £855 per month, and the minimum wage dropped to £1,698.
Ireland came in sixth place for highest minimum wage, just after the UK with £1,658, and £950 as the monthly living cost for Dublin.
France had the lowest minimum wage out of all the northern European countries ranked, at £1,517, with a monthly living cost of £922 in Paris. More than one in ten employees in France are paid less than 105 per cent of the minimum wage.
Minimum wage data was not available for Denmark, Italy, Austria and Finland.
Switzerland had the highest cost of living in the ranking with Zurich, a global centre for banking and finance, having a monthly living cost of £1,520 without rent.
This was even more than in New York, which was £1,249 per month.