UK vs US pricing – do we pay too much?
There’s a long-held perception that, compared with our transatlantic cousins, we tend to pay a premium for goods in the UK. If you’ve ever been on holiday to the States, you’ll probably have noticed the bargain prices of products compared with the cost of the same items back home.
Are we overpaying? We compared the costs of some of the most popular tech products to find out. We looked at several popular items from Apple, Sony, Google and others, as well as digital services including Microsoft Office and Adobe Creative Cloud.
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Do we pay too much?
Why the difference in price?
We asked the companies whose products we compared to explain the higher prices paid by UK consumers. Some, including Google, declined to comment. Others, such as Amazon, told us that there were ‘different operating costs in each country’, but couldn’t expand further.
Apple provided the most thorough answer, citing exchange rates, local import laws, business practices and taxes as explanations for regional price differences.
Are the differences justified?
While there may indeed be different operating costs from country to country, in some cases the price differences seem hard to justify. The 13-inch Apple MacBook Pro, for example, costs £1,499 on the UK Apple store. On the US site it’s £1,144 once tax is included.
We pay more tax in the UK, which plays some part in the price difference, but even with tax removed the MacBook Pro still costs over £190 more in the UK.
It doesn’t stop with physical goods, either. An annual subscription to Adobe’s Creative Cloud imaging software will cost you over £200 more in the UK. Other popular services, including Amazon Prime and Spotify, are also more expensive.
What can you do?
To take advantage of the cheaper prices in the US, you may want to consider importing. It’s worth doing the maths first, though – import duty, postage and taxes could soon swallow up any savings. However, get it right and you can certainly save some money.
Take the MacBook Pro as an example. If you were to import it to the UK, you could save between £100 and £150 pounds on the UK retail price, after fees.
Which? Expert’s View – getting fairer prices
One quick solution to fairer prices is to lower import duty fees. Currently, if you buy a product online from abroad the import duty threshold is £135. Buy it on holiday and it’s £390.
We’d like to see the government raise the threshold for goods bought online to the same amount, giving consumers more choice when purchasing goods.
As a long-term solution, negotiations are currently ongoing for a free trade agreement called the Transatlantic Trade and Investment Partnership (TTIP).
If it goes ahead, the TTIP could increase free trade and reduce conflicting regulation between the EU and US, ultimately resulting in more choice for consumers.
Jack Turner – senior researcher
You can read the full article in the August issue of Which?. If you have had any experience importing or buying abroad, let us know in the comments.
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