Dissecting living costs for expats in Luxembourg

Is Luxembourg’s reputation as an expensive city for expats really deserved?

In comparison with other European countries, Luxembourg seems always to come out as a place for those with massive salary cheques, but is this reputation truly deserved? When basic necessities such as clothing, food and accommodation are taken into account, the small country seems to be no more expensive than a number of its near neighbours. At an everyday level, it’s far from topping the list of horrendously expensive expat destinations, according to several well-known cost of living surveys.

In one survey regularly quoted by expat-aimed websites, Luxembourg ranks 14th and is well behind upscale locations such as Bermuda, Switzerland, Norway and even Iceland. It’s 17 per cent more expensive than Germany and 19 per cent dearer than Belgium, but its living costs total around the same as those in the UK, France and the Netherlands. Most expats choose to live and work in Luxembourg City and expect costs to be higher than in outlying areas, but again it’s good news against the higher costs in capitals such as Geneva, San Francisco and Reykjavik.

It’s no surprise that London is more expensive than Luxembourg City, as it’s more expensive than most other capitals worldwide, and Paris, Dublin, Amsterdam and Copenhagen are also far higher in the living cost table than Luxembourg’s capital. However, it’s a fact confirmed by research that the little country’s prices for services and goods are at a higher level when compared with a good number of other expat hubs. One thing’s for certain, comparing housing costs, prices of personal care items, eating out and some grocery outlets with their equivalents in a number of Europe’s other major capitals, you’ll realise you’re paying much more than you would have elsewhere.

However, a little more research shows salaries in Luxembourg are actually the highest in the whole of Europe, with the minimum wage at €1,998 per month. This means the average working Luxembourg resident’s purchasing power is also the highest in Europe. The ‘you get what you pay for’ scenario is evident in the country’s healthcare services, perhaps the most expensive in the entire European region, but also the best as well as operating on a reimbursement basis. Transportation is cheap, whether by car including the cost of fuel or public transport, and although childcare costs are very high, the excellent public education system is free for everyone registered with social security.

Of course, international schools are expensive in Luxembourg, just as they are anywhere in the developed world, but university fees are staggeringly low, with two-thirds of students receiving basic government higher education grants. Looking closely into the country’s average cost of living, it seems that costs balance out, giving a satisfactory life for both citizens and expats without too much penny-pinching.