How much will you earn in the UK? It’s a country of immigrants, millions of people of foreign origin live in the UK, and thousands of people come to study or build a career. But will your salary expectations satisfied in the second largest European country?
What is a good salary in the UK? A net monthly salary between £2,500 and £3,000 is considered a decent salary. This corresponds to the gross annual salary above £40,000. Everyone getting between £3,300 and £4,000 gross per month is a good earner.
The British capital London is a truly global city and magnet from expats from all over the world. Read this article to learn what to expect in terms of costs and salaries when moving to the United Kingdom in 2022.
What Is a Good Salary in the UK in 2021?
In the UK, a monthly net income between £2,000 and £3,000 is considered to be a good salary. With that income, you can afford a decent life in a large British city, including renting a two-bedroom apartment, eating out, and spending weekends away.
Furthermore, most Brits feel that a salary of £2,000 a month after tax is the minimum income for a comfortable lifestyle (for a single person).
A gross salary of around £40,000 a year is what you need to live a comfortable yet not extravagant lifestyle in the UK.
A couple with children both earning £40,000 will be having a very good life.
With a monthly net salary of £2,500 or £40,000 gross you are making enough money to finance a small flat or a car, go on holidays, and eat out regularly. At this point, you will start to enjoy life more.
With a monthly net salary of £3,000 or £48,000 gross, one can finance a better apartment, you will have a very nice lifestyle, go on the holidays, or have a very decent car (Mercedes, BMW, etc.)
If you want to buy a house in the UK and don’t have wealthy parents, you will need to earn significantly more than £3,000 or have a partner with a good salary.
In London, a very good salary is around £70,000, but in other places, it’s £50,000.
What is the minimum good salary in the UK?
£35,000 is the minimum salary in the North, and £60,000 is considered to be the minimum in London. Ideally, you want to earn £45,000.
Whereas £30,000 is considered a decent salary in the UK overall.
Location is by far the biggest influencer on your salary in the UK. Employees working in London earn significantly more.
What will your life look like with a good level of monthly income (£3,000 net) in London, UK. £3,000 net per month averages in an annual gross salary of about £50,000. It’s a realistic salary for most academics with a few years of experience.
- Housing: You can rent 1 bedroom apartment in the city centre (£1,500), utilities will cost you another £200 and £35 for the internet.
- Groceries and food: £500 – £600 – you can afford more expensive organic food.
- Disposal income per month: £665 for closing and shoes, personal items, eating out, entertainment, weekend trips, yearly holidays, etc.
- You can afford a more expensive hobby.
- You can go on holidays more often – 2 or 3 holidays a year, including a more long-haul destination or a week long winter sport vacation.
- You also can spend many weekends away.
- Saving: you will be able to put away at least few hundred pounds.
Check out which salary is considered to be good in London in this post.
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 when it comes 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):
- 20% – for annual salary between £12,570 and £50,270
- 40 % – for annual salary between £50,271 and £150,000
- 45% – for annual salary above £150,001
Yet, the majority of people pay 20% in income tax and 12% in social security. This will leave someone with a gross annual income of £40,000 with £30,864 after taxes or £2,572 monthly.
You have paid £5,484 in income tax and £3,651 in National Insurance.
With that salary, you can live a good middle-income life enjoying your weekends and traveling short distances for getaways.
Also, check out our comparison on living in the UK vs Germany. Btw, salaries are higher in Germany.
Salaries in the UK
In the UK, an average employee earns between £30,000 – £35,000 per year.
The median monthly pay of the UK employees in October 2021 is £2,004 gross per month or £24,048 annually. At the same time, the average salary in the UK was £38,600 in 2020, according to the ONS.
Someone with an annual salary of more than £70,000 is considered to be rich. Only 5% of all UK earners have this income and above.
Facts about UK salaries:
- In 2021, the average UK salary was £25,971 an increase of 0.3% compared to 2020
- The average full-time salary in the UK fell 0.6% to £31,285 in 2021
- Part-time workers in the UK earn on average £11,310 a year
- Full-time male employees get 18,05% more than their female counterparts, averaging £5,109 each year
- Average male CEOs make £24,999 more than female CEOs each year
- Pub owners and managers saw the biggest percentage decrease in earnings in 2021 at 34.2%
- The highest earners are under age between 40 and 49, with income averaging £35,757
Compensation in the UK varies depending on job skills and positions and can range vastly.
Also, according to the latest OECD data, salaries in the UK are above the European average and rank at number 15 out of 36 countries.
Average salaries in London:
In other British cities, numbers are lower.
Minimum wage in the UK
In 2021, the minimum wage in the UK is £8,91 per hour for someone above age 23.
Average salary in the UK
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.
However, 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.
Hence, if you earn over £31,000 in the UK, you shouldn’t feel underpaid.
The average salary in the UK in 2021 for most popular job positions:
- IT Technician – £31,731
- Administrator – £25,050
- Construction Project Manager – £40,549
- Business/Corporate Project Manager – £58,478
- Police Officer – £26,605
- Education Support Assistant – £16,700
- Business Development Manager – £52,500
- Labourer – £28,237
- Receptionist – £17,808
- Sales Executive – £26,302
- Account Manager – £52,500
- Quantity Surveyor – £42,511
- Care Assistant – £18,255
- Chef – £21,282
- Managers – £58,862 (although this varies widely depending on your field)
- Nurse – £32,338
- Electrician – £31,277
- Doctor – £41,494
- Lawyer – £63,771
- Writer – £33,887
- Teacher – £39,388
- Business Analyst – £49,079
- Finance Professionals – £42,578
- Customer Service Advisor – £21,494
- Engineer – £43,628
What is a good salary for London?
A salary of £40,000 is considered to be good in London. However, a more comfortable income starts at £50,000.
£40,000 will give you around £2,550 per month after tax, while it’s £3,000 with £50,000.
With £50,000 annual salary, your breakdown of monthly costs in London might look like this:
- Rent: £1,200
- Bills Council tax, water, electricity, internet, phone: £250
- Transportation: £120
- Food: £500
- Others (leisure, going out, clothes, cosmetics, gym, etc): £250
The total fixed cost is around £2,320 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 a decent amount in savings every month.
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.
Finally, for a normal, comfortable life in London for a single person, you would need a salary of at least £40,000 a year. For a couple, both need to earn at least £40,000, so the household income will be about £4,000.
This household income will cover your rent, transport, lunches at work, groceries, and you would be left with around £1,500 to spend on entertainment, going out, saving, and traveling every month.
Is 130,000 GBP a good salary in the UK if you are coming from the US?
130,000 GBP per year is a lot of money in the UK. With an income of 130,000 GBP, an employee belongs to the top 1% of UK earners.
With a gross annual salary of 130,000 GBP, as a single, you will get about 78,675 GBP after tax. Every month, you will receive 6,556 GBP. It’s a good income for a single person.
The annual salary of 130,000 GBP could be seen among pilots, surgeons, bankers, or top CEOs.
If we compare it to the normal couple earning 40,000 GBP annually, they receive a net wage of 30,582 GBP.
Hence, a couple will have about 5,097 GBP in disposable income every month. Meaning as a single with an income of 130,000 GBP, you are far above ordinary people.
However, if you are the sole earner in the family, don’t expect to be that much better off than a working couple.
It’s not uncommon for a software engineer in a top US location such as San Francisco to earn around 150,000-160,000 USD (112,347 – 119,837 GBP).
Whereas, for the same position you can get about 105,000 GBP in London. So, we don’t see a very significant difference there.
In fact, you might even get a better deal in the UK. Rents are lower, and so is health insurance.
However, you need to consider whether you are liable for US taxes (US citizen?) and how much your total tax burden will be. In the UK, employees with an income of 130,000 GBP fall into the 40% income tax bracket.
Is £50,000 a good income in the UK?
In the UK, the salary of £50,000 is above the average. It’s a very decent salary in the UK.
The average total salary for a family with two working adults is £40,000. £50,000 gross will bring you 67% above average income. Hence, you are well off by at least 67% more.
Furthermore, an employee doesn’t pay high taxes on such income. They are still in the 20% bracket for income taxes.
The income tax and National Insurance you will pay on this salary will be about £13,000 per year – leaving you with around £37,000.
If you are considering buying real estate, the mortgage repayments could easily take up well over £10,000 annually.
Highest paying jobs in the UK
Here is the list of top earners in the UK:
|Job||Average annual salary|
|Marketing and sales directors||£69,779|
|Train and tram drivers||£59,189|
|Advertising and public relations directors||£58,948|
|Senior police officers||£58,734|
|Senior professionals of educational establishments||£58,268|
|Financial managers and directors||£58,028|
|Senior officers in protective services||£56,135|
Where the best fields to work in the UK are:
- Accounting, banking and finance
- Consulting and management
- Marketing, advertising
- Recruitment and HR
The service sector dominates the UK economy. Banking, insurance, and business services are all key drivers of the country’s growth.
Other important British industries include metals, chemicals, aerospace, shipbuilding, motor vehicles, food processing, textiles and clothing, design, the arts, and electronic and communications equipment.
Apart from that, expats and foreign workers can find the most job offerings in areas with skill shortages:
- Business services – analysts, market researchers, HR officers
- Construction – surveyors, planners and project managers
- Education – primary and secondary school teachers (particularly maths teachers)
- Engineering – electrical, mechanical and chemical engineers, civil engineers and product and process engineers
- Healthcare – nurses, medical radiographers and pediatricians
- Hospitality – baristas, chefs
- IT – cyber security analysts, SEO marketers, software developers and systems engineers
- Social care – counselors, social workers
Occupations in demand include:
- Bank clerk
- Insurance clerk
- Business economist
- Social worker
- Doctor / Physician
Lowest paying jobs
Yet, some jobs are extremely underpaid in the UK, among others:
|Job||Median annual salary|
|Beauticians and related occupations||£15,210|
|Hairdressers and related services||£15,357|
|Leisure and theme park attendants||£16,194|
|Kitchen and catering assistants||£16,254|
|Smiths and forge workers||£16,519|
|Educational support assistants||£16,721|
|Launderers, dry cleaners and pressers||£17,295|
Top paying industries
The industry has a significant influence on your salary level in the UK. The most important sectors in the UK are:
- Public administration
- Information Technology
Another article you might like: salaries in Germany vs US
Average expenses in the UK with average salary
In short, about the cost of living in the UK:
- Family of four estimated monthly costs: £3,564
- Single person estimated monthly costs: £2,014
- Cost of living in the UK is more expensive than in 64% of countries in Western Europe (6 out of 14)
- 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%). In 2020, London was ranked among the 10 most expensive cities to live in Europe. Cheaper locations include cities in northern England.
- In London, the rent of a one-bedroom apartment will be £1,662
- Meal for 2 – £60
- Transportation (monthly pass) – £158
No surprise that rent is our biggest expense when moving abroad. It contributes to at least 30% of our monthly budget.
In London, the closer you are to the center, the higher the rent.
Renting a one-bedroom apartment close to the city center in London would cost you about £1,600 a month, but you can choose one outside the city center for about £1,100.
On the other hand, renting a family home costs about £3,100 a month on average in the city center and about £1,900 for one outside the center.
However, rents in other English cities are lower. For instance, in Manchester, you will get a one-bedroom apartment for about £700 a month.
|Housing in London||Average monthly cost|
|One-bedroom apartment (city center)||£1,662|
|One-bedroom apartment (outside of city center)||£1,272|
|Three bedroom apartment (city center)||£3,188|
|Three bedroom apartment (outside of city center)||£2,081|
|Utilities (gas, electric, and water for an 85m2 apartment)||£171|
Consequently, more and more people are unable to 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.
Overall, the average rent for a small studio apartment in the UK is £708.
Public transport prices are high in the UK. A London’s monthly pass for subway+train can cost you £360 per month.
Cost of living in London
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.
The total cost of living in London is about 38,5% higher than the Central European average.
People with children 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.
Example of cost of living in London:
- Rent: £2,219 per month (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: £37
- 2 theatre tickets: £171
- 1 cocktail in a club: £11
- 1 pint of beer: £5,20
See more on cost of living in London in this article.
Taxes in the UK
In the UK you will pay significantly fewer taxes than in many other European countries – just about 24,90%. With an average annual salary of £35,000, you will take home £27,464. Hence, you just paid around 22% in taxes.
Income tax – between 20% and 45% (20% is most common). You can see rates for 2021 – 2022 below.
|England/Wales/Northern Ireland tax band||Taxable income||Income tax rate|
|Personal allowance||Up to £12,570||0%|
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 can sign for a private health insurance, which will save them money.
For example, if you earn £4,000 a month 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 salary||Class 1 National Insurance rate|
|£9,568 – £50,270||12%|
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 the UK?
How much money you need to live comfortably comes to the cost of living. Generally, you can live comfortably on between £2,000 – £3,000, depending on the location and your personal situation.
London is the most expensive city, hence, count with higher expenses.
With such income, you will cover all things related to accommodation, general expenses, and leisure activities.
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