Based on indicators including rental costs, house price growth, disposable income growth, employment rate, life satisfaction, cost of living and salaries Cardiff came out on top.
It costs £359 per week to live in the Welsh capital, rental prices are £873 and the unemployment rate stands at 8.1%, while it has the second highest disposable income growth of 3.7%.
The most difficult place to live is Birmingham, where rental prices have rapidly increased to £756 per month, the unemployment rate is the highest on the index at 13.1% and the life satisfaction score is second lowest at 7.22.
Dan Plant, Consumer Finance Expert at MoneySuperMarket, said: “On a national level, the economy is performing well. Big contributors to that are growth in salary, disposable income and house prices, while unemployment has fallen.
“However, the precise story differs city by city. While some, like Cardiff, Belfast and Bradford measure up well against many of the indicators, others aren’t feeling the benefit of the rising economic tide.
“For instance, Liverpool was the only city in which the unemployment rate increased, in Sheffield average salaries actually fell, and in Birmingham the cost of renting increased by a huge 26% - compared to a 12% average across these big cities.”
Belfast and Bradford are the second and third most attractive places to live according to the index, up from eighth and twelfth in 2013. In both areas rents are relatively low at £686 and £490 while the cost of living stands at £423 and £366.
Rental prices have increased rapidly in comparison to house prices in Scottish cities, as Glasgow and Edinburgh experienced rental price increases of 20% and 23% and house price growth of 5% and 9% respectively.
London improved its standing from seventh to fourth primarily due to property growth by 26%, while the capital also has the highest average salaries of £30,479.
Plant added: “The UK’s quality of living has suffered in recent years and, despite positive outlooks for the UK economy, many households are still struggling to make ends meet each month.
“This year’s report shows a clear divide still exists between increases in salaries and the rising cost of living. Rent price hikes and low disposable income growth are key factors here, and help explain why the top 12 cities have moved around the Quality of Life Index so much.
“The position could change further with expected rises in Bank of England Base Rate which could impact disposable income levels, particularly in cities where the cost of housing is high such as London and Edinburgh.”