What Is a Good Salary in London?

People from around the world move to the British capital in hopes of a better future, thus, the income. How much will you earn in London, UK? Will London meet your salary expectations?

What is a good salary in London, UK? A net monthly salary between £2,800 and £3,000 is considered a decent salary. This corresponds to the gross annual salary above £45,000. Everyone getting between £3,300 and £4,000 gross per month is a good earner.

British capital attracts thousands of expats and migrants every year. Yet, London’s salaries aren’t as high as its cost of living. London is the most expensive place to live in the United Kingdom. Read this article to learn what to expect in terms of expenses and salaries when moving to London, UK, in 2022. Learn about salary in the UK in this article.

What is considered a good salary in London in 2022?

A salary of £50,000 is considered to be good in London. If you have a family, a more comfortable income starts at £60,000.

With that income, you can afford a two-bedroom apartment not far away from the city center, eating out, and traveling around on weekends.

Even after paying tax, it’s still a good salary for a single person, giving you a decent standard of life. A family will likely need two incomes to have a good standard of living.

According to the different resources, the average salary in London is £53,700 in 2021. This translates to £4,475 in monthly wage (Plumplot 2021). In contrast, the average salary across the country is only £38,100. Hence, the high cost of living in London is reflected in the wages, which are by far the highest in the UK.

Yet, not everyone in London earns an average salary. Some people have to live on less. And there are also some small amount of people making over £100,000 annually.

Are you American and looking for a job in London?

According to the statistics, the average gross salary in London is £53,700 in 2021.

Furthermore, the Average salary survey reports that the average salary in London as of January 2022 is £60,921 ($84,922 USD) and most typical £33,717 ($47,000 USD).

Example of a good salary in London

Base gross salary: £53,700, comes to £3,320 monthly after tax. Salary of £50,000 will give you around £3,000 per month after tax, while it’s £2,550 with £40,000.

What will your life look like with a good level of monthly income (around £3,000 net) in London, UK. £50,000 is a realistic salary for most academics with a few years of experience.

  1. Housing: You can rent 1 bedroom apartment in the city centre (£1,500), utilities will cost you another £200 and £35 for the internet.
  2. Groceries and food: £500 – £600.
  3. Transportation: £120.
  4. Disposal income per month: £545 for closing and shoes, personal items, eating out, entertainment, weekend trips, yearly holidays, etc.
  5. You can go on holidays 1-2 times a year.
  6. You also can spend some weekends away.
  7. Saving: you might be able to put away a few hundred pounds.

Learn more about cost of living in the UK.

The total fixed cost is around £2,440 per month. With a salary of £50,000, you will receive £37,000 annually after-tax or about £3,000 per month. Consequently, someone with an income of £50,000 can even put aside some amount in savings every month.

Finally, for a standard, comfortable life in London for a single person, you would need a salary of at least £40,000 a year. For a couple, you need to earn at least £60,000-70,000 if your partner doesn’t work. That’s about £3,624 – £4,108 in the household income.

This household income will cover your rent, transport, lunches at work, groceries.

Also read: What is a good salary in the UK?

Gross vs Net

Net salary is an amount without income taxes and deductions for social security contributions. Overall, taxes and social security contributions are around 25% of the employee’s gross salary in the UK.

The most common income tax rate is 20%, and social security employees pay between 0% and 12% of their salary, depending on the level and class of income. Employers also pay a share.

British social insurance includes unemployment, sickness, disability, occupational accidents, occupational diseases, maternity, widowhood, and pensions.

In the UK, the so-called “pay as you earn” (PAYE) system applies to income taxes. The tax-free amount is £12,570 per year. Generally, there are three income tax rates (slightly different rates apply in Scotland):

  1. 20% – for annual salary between £12,570 and £50,270
  2. 40% – for annual salary between £50,271 and £150,000
  3. 45% – for annual salary above £150,001

Yet, the majority of people pay 20% in income tax and 12% in social security.

Learn about highest-paying jobs in London and jobs that are in high demand.

Salaries in London

The job market is huge in London, and so is the number of immigrants from all corners of the planet. Salaries in London range a lot. You can earn as few as £14,000 per year or as much as £100,000 in the executive role.

For example, interns and fresh graduates earn the least in the professional field. Also, people with no official degree are among low earners.  

Junior or executive roles usually start at £18,000 and finish at £30,000-£32,000, depending on your experience. Managerial positions start at £35,000-£49,000 and can go far beyond.

Also, software developers always have higher salaries, so with 2-3 years of experience as a backend developer, you can get a wage of £40,000-£55,000 a year.

Managing living expenses while earning below £30,000 in London will be difficult.

Furthermore, a high salary is required for someone willing to purchase real estate in London. You want to earn around £100k per year alone or together with your partner to buy a three-bedroom house in London.

If you make less than £100k, it’s possible to purchase a 1 or 2 bedroom apartment. Alternatively, homes can be obtained outside London, but it will involve a solid daily commute.

Which city is better for living London or Toronto?

Average salary in London

According to the statistics, the average gross salary in London is £53,700 in 2021 (Plumplot 2021). In January 2022, the average salary survey reports that the average salary in London is £60,921 ($84,922 USD), while the most typical salary was £33,717 ($47,000 USD).

However, resources like Glassdoor and Payspective indicate that the average wage in London is about £41,000. This is the monthly average wage, including all benefits and bonuses.

The most common salary ranges in London are:

  • £32,000-£36,000
  • £36,000-£39,000
  • £39,000-£43,000
  • £43,000-£47,000
  • £47,000-£50,000
  • £57,000-£61,000

Furthermore, men earn on average £65,855 and women – £49,858. Yet, salaries vary drastically between different careers.

The best-paid jobs in London are in Finance & Banking with an average income of £80,203 and Management & Business with £76,688 annually.

Depending on the education, the highest salaries receive people with Doctorate Degree with a salary of £77,979. The second most paid professionals have Masters’s Degree – £64,349.

Your work experience affects earnings as well. So, people with 20+ years of experience receive a salary of £85,368. Employees with 16-20 years of experience receive £82,929.

The average salary in London among different professions:

#Professional fieldAverage salary/Year
1Finance & Banking£80,203 GBP
2Management & Business£76,688 GBP
3Law£75,827 GBP
4Properties & Real Estates£74,608 GBP
5Insurance£71,595 GBP
6Engineers & Technicians£67,936 GBP
7IT & Programming£67,577 GBP
8Agriculture & Fishing£67,075 GBP
9Construction & Labor Workers£65,640 GBP
12Human Resources£59,973 GBP
13Engineers & Technicians£57,319 GBP
15Health Care & Medical£55,453 GBP
16Accounting & Administration£54,306 GBP
18Military£51,938 GBP
19Marketing, Sales, Purchase£51,436 GBP
21Geography & Geodesy£49,714 GBP
22Making Design£48,853 GBP
23Media£47,203 GBP
24Salesmen & Saleswomen£46,486 GBP
25Architect Constructions£45,195 GBP
26Logistics, Road, Railway£44,908 GBP
27Sports & Recreation£44,764 GBP
28Aviation & Shipping£44,549 GBP
29Hotels & Tourism£43,473 GBP
30Education & University£42,397 GBP
31Public Sector£42,253 GBP
32Automobile£41,393 GBP
33Fashion£41,034 GBP
34Arts, Culture, Performance£40,317 GBP
35Manufacturing & Labor Workers£37,447 GBP
36Organization & Coordination£36,730 GBP
37Security & Fireguard£34,936 GBP
38Customer Services£33,717 GBP
39Restaurants, Inns, Pubs£32,282 GBP
40Archaeology & History£28,910 GBP

In other British cities, these numbers are significantly lower. To compare here are average salaries for some typical jobs in the UK:

Cashier£15,483
Copywriter£34,113
Financial analyst£40,042
Graphic designer£26,738
Mobile developer£41,431
Product manager£46,063
Receptionist£17,553
Software engineer£42,925
Teacher£25,539
Web developer£32,664

Highest paying jobs in London

Some of the highest paying jobs in London are:

  1. (Key) account manager
  2. Lawyer
  3. General counsel
  4. Engineer
  5. Workers in technical research and development
  6. Medical specialist
  7. Workers in business development
  8. Tax consultant and auditor
  9. Workers in production planning and controlling
  10. Consultant

Average salary in the UK

When talking about salaries in London, we also should mention the average income in the UK in general.

According to the ONS, the average gross salary in the UK in 2021 was £25,971 or £21,324 after-tax for a single person. This translates to the £1,777 net monthly wage. Other sources state that the average salary across the country is £38,100. These numbers include holiday pay and other benefits.

In April 2020, the average earnings for full-time employees were around £31,461 a year, while part-time workers in the UK earn an average of £11,310. Another data confirms that the average salary in the country in 2021 is £29,600.

Nonetheless, a working person in the UK typically earns between £2,600 – £3,000 gross per month. The most common salary in the UK is between £32,000 and £36,000.

Hence, earning over £31,000 in the UK puts you in above-average income.

Minimum wage in the UK

In 2021, the minimum wage in the UK was £8,91 per hour for someone above age 23.

Average expenses in London with average salary

Of course, the salary needed to live in London in 2021 heavily depends on your lifestyle. One is clear, you need at least £1,900 per month to have a most basic life.

The average cost of living in London is about £2,892 per person per month. The Price Index for the city of London is 222. This score indicates that food, rent, and other necessities are more than twice as expensive in London than in the average global city. 

Learn how much a family spends in the UK.

The total cost of living in London is about 38,5% higher than the Central European average.

People with kids need more money. The cost of living for a couple with a one-year-old is around £49,714 annually or £4,142 monthly. Childcare is expensive in London.

Furthermore, don’t be surprised but the cost of living in New York City is about the same as in London.

Example of some ordinary expenses in London:

  • Rent: £2,219 per month for a couple or family (Average across London for the beginning of 2021)
  • Basic public transport monthly ticket: £146
  • Taxi fare for a 5-mile journey on a business day: £26
  • Dinner for two in a pub: £38
  • 2 theatre tickets: £171
  • 1 cocktail in a club: £11
  • 1 pint of beer: £5,20

Cost of living in London: 

  1. Family of four estimated monthly costs: £5,057
  2. Single person estimated monthly costs: £3,051
  3. London is the 3rd most expensive city in Western Europe
  4. Cost of living in London is more expensive than in 97% of cities in the World
  5. Whereas cost of living in the UK is more expensive than in 83% of countries in the World (12 out of 63)

You will spend significantly more money in London (at least 20%) than in all other locations. In 2020, London was ranked among the 10 most expensive cities to live in Europe. If you want to relocate to the UK but pay less, cheaper locations can be found in northern England. 

  • In London, the rent of a one-bedroom apartment will be £1,662
  • Meal for 2 – £60
  • Transportation (monthly pass) – £158

Housing

London is famous for obscure rent prices. Rent in London will contribute to at least 30% of your monthly budget. The closer you are to the city center, the higher the rent.

If you want to live in a nice neighborhood in a decently connected location (that would be zones 2-3 of London), prepare to pay around £1,200 for a studio and £1,500-1,600 for a 1-bedroom flat. 

On the other hand, renting a family home costs about £3,100 a month on average in the center and about £1,900 for one outside the center.

However, you can share a place with other people, and that would be way cheaper.

Rents in other English cities are significantly lower. For instance, in Manchester, you will get a one-bedroom apartment for about £700 a month.

Average monthly costs for various housing types in London:

  • Room flat share: £600-£1,200
  • 1 bed apartment city center: £1,400 – £1,700
  • 1 bed apartment outside city center: £1,200 – £1,400
  • 2 bed apartment: £1,900-£2,400
  • 2-3 bed house: £1,900-£3,300
  • Internet: £32
  • Utilities (gas, electric, and water for an 85m2 apartment): £171
  • Council Tax: £80

Consequently, more and more people cannot afford to live in London. Hence, they are moving to cities nearby. This fact has driven prices high in those cities as well. Thus, the cost of living in any town near London has skyrocketed.

Food

Food in London is on the European average but more expensive than in most EU countries. Eating and drinking out is particularly pricey. You can easily spend £50 – £100 in one evening.

A beer costs £6, a cocktail £12, and having a meal will set you back on £30-£40 per person.

Groceries are available at more affordable prices at the discounts like Aldi, but regular and high-level supermarkets are more expensive. Your weekly bill for groceries can be around £200 for a family of four when shopping in the average supermarket. That comes to at least £800 per month on food for a family.

As a general rule, expats should budget around £500 – £600 per month for grocery shopping in London, while singles and students will be able to live off on less.

Consumer spendings

On average, a British household spends £51 a week on restaurants and £76,90 on entertainment and culture, £21 on communications, and £24 on clothing. To summarise, it averages about £700 per month.

Public transport

Public transport prices are high in the UK. A London’s monthly pass for subway+train can cost you £360 per month.

Holidays

The money you will spend on holidays also should be considered, although it’s not must-have expense. Yet, all Brits go on vacation time from time. In fact, the average Brit goes on holiday twice a year, and it costs £850 each time.

That’s an additional £1,700 per year for a single. Families need to multiple it on amount of people.

Is £50,000 a good enough salary to live in London?

£50,000 isn’t a high salary for London but high enough to cover all your living expenses. In fact, it’s very close to the average wage across the city (£53,700). With a gross annual salary of £50,000, you will take home £37,537 after taxes, which is around £3,000 a month.

Yet, in the UK, the salary of £50,000 is above the average. It’s a very decent salary in the UK. Furthermore, an employee doesn’t pay high taxes on such income. They are still in the 20% bracket for income taxes.

If you consider buying real estate, the mortgage repayments could easily take up well over £10,000 annually.

Is £60k a good salary in London?

£60,000 is above average salary in London and gives you £3,500 per month after tax. It’s a good income for a young, single individual. For someone with family and partner earning a similar amount, even purchasing a house is possible. Yet, a family or couple with a single income of £60,000 will have a moderate lifestyle in London.

Expenses with £60,000 income in London:

  1. House rent (furnished): If you want a double bedroom apartment in areas like Pimlico (1 km form Victoria), it would cost around 1700£ + 250£ for bills = 1950£ (The bills include council tax, electricity, water, gas, internet)
  2. Travel: Assuming you go out once in a week, 5£ on average per head = 60£ (5 * 3 people * 4 weeks) + you might have to travel sometimes 15£ per month = 75£
  3. Dining out: On average it will cost around 15£ per head = 180£ (15 * 3 people * 4 weeks)
  4. Food: Average 25£ per day, assuming you will not buy fancy stuff or readymade food = 750£ (25 * 30 days).
  5. School: I do not know much about it. I moved here alone an year ago. But I think it should be the same as in Ireland?
  6. Savings: 200£
  7. General: General groceries/equipment for house = 100£

Total costs and saving: £3,255

Why are British salaries so much lower than American?

Is £70k a good salary in London?

£70,000 is averaging of £4,050 monthly income after tax and is an excellent salary for a single person in London. It’s also a good salary for someone with a family. As a family, you can afford a moderate lifestyle in London. This income allows one to go out and travel often.

Is £95k a good enough salary in London?

A salary of £95,000 is much higher than London’s average and gives you an amazing lifestyle whether you are single or have a family. In fact, £95,000 gross per year or £63,793 net (£5,316 monthly) allows one to have a luxurious life. You will easily pay for your high rent or mortgage, travels, and all daily expenses.

The average salary in London is around £53,000, £95,000 is almost twice as much.

Is a £100k gross salary a good salary in London, UK?

£100,000 annually puts someone in the top 2%-3% or so of earners in the UK. Most British people would consider it an excellent salary. Even in the expensive London, it would be regarded as exceptionally good income.

With a gross annual salary of £100,000, as a single, you will get £66,644 or about £5,554 after tax every month. So you could easily afford the top end of average rents, and a mortgage would be even more manageable if you have savings for a deposit.

Let’s look into expenses you might have when earning £100,000 in London:

  • £2,134 (mortgage)
  • £150 (council tax
  • £425 (commuting)
  • £749 (eating out, entertainment, communications, clothing)
  • £419 (groceries for family of four)
  • £567 (holidays)

= £1,055 left after all major costs.

Moreover, with such income, one might decide to get a car, which automatically adds around £2,000 in spendings every year (tax, insurance, upkeep).

Taxes in the UK

While working in London, you also need to consider how much taxes will be deducted every month from your salary. Fortunately, UK taxes are significantly lower than in most European countries. It comes to about 24,90% of your gross income.

With an average annual salary of £40,862 (according to Glassdoor), you will take home £31,450. This means £2,621 in your pocket a month. Hence, you just paid around 24,1% in taxes. 

The UK’s income tax is between 20% and 45% (20% is most common). You can see rates for 2021 – 2022 below. 

England/Wales/Northern Ireland tax bandTaxable incomeIncome tax rate
Personal allowanceUp to £12,5700%
Basic rate£12,571–50,27020%
Higher rate£50,271–150,00040%
Additional rate£150,001+45%

Social security – employee pays 12% from the salary; 2% for income above £4,189 per month. At the same time, the employer contributes another 13,8% (15,05% from April 2022) to the national insurance. Expats, foreign employees, as well as business owners, can sign for private health insurance, which will save them money.

For example, if you earn £4,000 a month gross or £48,000 a year, you pay:

  • nothing on the first £9,568
  • 12% on the next £38,432
  • total in social security £4,611
Your annual salaryClass 1 National Insurance rate
Less £9,5680%
£9,568 – £50,27012%
Over £50,2702%

Alternative to the national insurance in the UK

As an expat in the UK, you can sign for private health insurance, which will save you money. With 74,000 employees, 200 years of experience, and more than 100 million customers globally, Cigna is one of the largest international insurance providers in the world.

In the UK, Cigna has been operating since 1983. Their offerings include health insurance, dental insurance, absenteeism management, occupational health services, and well-being programs.

Visit their website to learn more and choose the optimal coverage for your situation.

How much money do you need to live comfortably in London?

How much money you need to live comfortably comes to the cost of living. Generally, you can live comfortably on between £2,500 – £3,500, depending on the location and your personal situation.

London is one of the most expensive cities in the world. Hence, you will see high price tags on almost everything you encounter. Reducing the frequency of going and eating out will save you a significant amount every month.

With such income, you will cover all things related to accommodation, general expenses, and leisure activities.

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