Being underpaid isn't a function of being in a particular region (assuming your in America). Middle America Jr. Devs with little/no programming experience are getting started around $70K.
Software developers in the US tend to be paid much more than anywhere else in the world, and often don't realise this.
In the UK, a salaried senior software developer would typically make £45-60K before tax (currently around $70-90K US). Working for someone else as an employee, you'd expect to reach that level after maybe 5-8 years, but then stick there for the rest of your career. Obviously the rates can be higher with special circumstances and they are somewhat higher if you're working in London, but anything close to what is normal in the US would be a rare exception in the UK (and most other places outside the US).
There has been a 25% fall in the GBPUSD exchange rate over the past few years which needs to be factored in when comparing salaries. The Bay Area can make London seem an affordable place to live.
But that being said, there is still a significant difference in wages for salaried positions. Contracting rates seems much more similar. And the tax treatment for contractors in the UK is so favourable as to make it more worthwhile than all but the very highest salaried developer roles in the City.
And the tax treatment for contractors in the UK is so favourable as to make it more worthwhile than all but the very highest salaried developer roles in the City.
IME as someone who does freelance work in the UK, the tax treatment usually isn't a big win. There are some tax advantages, but in practice they are usually balanced or significantly outweighed by the extra overheads of running a business (accounting, legal, insurance, equipment purchases, etc.), the loss of typical employee benefits (paid time off, pension contributions, etc.), and the risk of downtime when you don't have work. If these kinds of downsides don't apply to you, then you're likely to be treated as a disguised employee and the IR35 rules will negate the tax advantages as well.
I find the big difference in moving to contract/freelance work in the UK is that you change the frame of reference from employer-employee negotiations and their associated expectations to business-business negotiations and their very different associated expectations. If you're good, and therefore generate a lot of obvious value to clients, the latter removes the glass ceiling. I suspect not coincidentally, as you mentioned, rates for this kind of work seem to be much more consistent among different countries.
As another person mentioned, being in the UK you face different challenges. My reply was partially to help you, but also to let other American programers know that there are better options out there.
