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Is 40k a Good Salary in the UK?

Tobi Opeyemi Amure
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Is 40k a Good Salary in the UK?

“Is 40k a good salary in the UK?” is a pressing question for many aiming to understand their financial standing.

In this article, I’ll explore the value of this salary in relation to the UK’s living costs and lifestyle standards, providing clarity on whether it meets your desired living expectations.

So, in a nutshell, is 40k a good salary in the UK? Yes, £40k is considered a decent salary in the UK, being above the national median wage. On this income, individuals can generally maintain a moderate lifestyle, covering basic living expenses and possibly saving or investing a portion. However, the actual standard of living this provides can vary based on regional living costs, with certain areas like London being more expensive.

This article was reviewed by Tobi Opeyemi Amure, an investing expert and writer at, and

Is 40k a Good Salary in the UK?

Earning £40,000 annually in the UK is considered a good salary, surpassing the national full-time average of £33,280 by £6,720.

While £40k is slightly below London’s average of £41,866, it’s considerably higher than the £29,521 average in North East England, the UK’s lowest in 20221.

Most parts of the UK, excluding London, view a £40k salary as above-average.

This income typically reflects a mid-range or lower management position, suggesting some work experience.

Outside of major UK cities, £40k provides even more purchasing power, allowing for comfortable living and potential savings.

What Is 40k After Tax? Evaluating Take-Home Pay

With a £40,000 salary, you’ll get £30,523 after tax and National Insurance. This is £2,544 each month, or £587 weekly. If you work 5 days a week, that’s £117 daily or £15 hourly for a 40-hour week2.

£40k salary after tax in the UK.

Additional pension contributions, student loan repayments, and other payroll deductions would further reduce take-home pay.

Is £40k a Good Salary for My Age?

Earning £40k a year puts you ahead in all age brackets.

AgeMedian Average Yearly

Is £40K a Good Salary Where You Live?

In many UK regions, £40k is a notable salary, but it’s slightly below London’s full-time average of £41,866.

In places such as the North East or Northern Ireland, with average salaries close to £30k, £40k is impressive. You get more value for your money in the North East than in London.

Statistic: Median annual earnings for full-time employees in the United Kingdom in 2022, by region (in GBP) | Statista
Find more statistics at Statista

Is 40k a Year Enough to Live in the UK?

Yes, a £40k salary is sufficient to live in the UK. It’s above the national average wage.

While living costs vary by region, this income allows for a comfortable lifestyle in most areas, though in London, it’s closer to the median salary.

Budgeting wisely will enhance financial stability on this income.

Can You Live in London on a £40k Salary?

With a £40k salary, living in London is possible, even if it’s slightly less than the city’s £41,866 average.

London rent may cost more than in other UK areas, but it’s manageable.

At the same time, working in London can lead to better earnings.

You may have to cut back on fun activities to save and invest and living with a partner or friend can help save on rent.

How Much to Spend on Rent With a £40K Salary?

With a £40k salary, aim to spend 30-40% (or £750 to £1000) of your after-tax pay on rent.

Don’t forget to budget for utilities, internet, transport, and insurance.

In London, this budget might get you a shared room due to high rents, while in the North, you could rent a one-bedroom flat in the city or a two-bedroom house in the suburbs.

Sharing with a housemate or partner can help save more money for other goals.

Can I Buy a House on a 40k Salary?

With a £40k salary, you can buy a house, especially with a partner.

Aim to save at least a 5% deposit, but 10% is better.

Lenders might let you borrow 3.5x to 5x your salary before tax. So, you could borrow up to £160,000.

At a 6% interest rate, that’s a £959 monthly payment for 30 years. This is above the advised £700 to £850 housing cost each month.

If buying alone, think about a smaller loan since you’ll have other bills like council tax and utilities.

If you buy with a partner who works, a £160,000 loan is easier to manage. But be careful. Just because you can get a big loan doesn’t mean it’s a good idea. Stick to what you can comfortably pay back.

With a 10% deposit, you might afford a house between £175,000 and £220,000. The UK usually lets you loan up to 5x your yearly salary before tax. Adding a partner’s salary to a joint loan can boost this.

Freelancers might get different offers because lenders see them in a unique light.

In London, £200,000 won’t get you much. But in rural areas, you might be able to buy a nice flat or a small house.

Evaluating Savings Potential on a £40k Income

When assessing if a £40,000 salary allows comfortable living in the UK, it’s important to consider factors impacting your ability to save and build wealth over time:

  • Taxes: Taxes like income, property, and VAT take 20-30% of your gross pay. By using tax planning methods such as retirement accounts, ISAs, and deductions, you can increase your monthly savings and investments.
  • Retirement Contributions: Paying into pensions like SIPPs and employer schemes lowers your taxable income now and saves for later. Small payments grow a lot with years of compound growth.
  • Debt Obligations: Large debts from student loans, credit cards, or car loans reduce the money you can save each month. Paying debts quickly cuts interest and helps save more.
  • Children and Family: Having kids increases monthly expenses, but they inspire strong saving for their future. Saving even a little now can lead to large university funds later.
  • Housing Costs: Paying less on rent or mortgage allows you to save more each month. Consider flat sharing, living in cheaper areas, or buying a small first home to cut housing costs.
  • Commuting Costs: Living near work cuts transport costs. Remote or hybrid jobs can remove these costs, letting you invest the savings.
  • Frugal Lifestyle: Choosing to eat at home, look for deals, and skip pricey trips can help you save a big part of your £40k income. These simple changes make a difference.
  • Investing Diligently: Just saving isn’t enough. Investing in stocks, funds, and property makes your money grow with compound returns over time. Though it’s tough to save and invest on a £40,000 salary, smart choices in taxes, spending, and investing can build wealth over the long run.

What Can You Do With 40k Salary UK?

Earning a £40,000 salary in the UK is above the national average for individual earners. However, the comfort and possibilities associated with this income will vary depending on several factors, such as your location, personal circumstances, and lifestyle choices.

Here’s a breakdown of what you might expect and some suggestions for managing a £40k salary in the UK:

  1. Location: Your location plays a significant role in how far your money goes. London and the South East, for instance, have higher living costs than many other parts of the country. On a £40k salary, you’d lead a moderate lifestyle in London but could live more comfortably in many other regions.
  2. Housing:
    • In pricier areas like London, you may be looking at renting a room or a studio apartment. Outside of London, this salary could afford you a one or two-bedroom apartment.
    • Homeownership could be within reach if you’ve saved for a deposit, particularly outside of London.
  3. Transport:
    • Maintaining a car would be feasible, though you might need to consider the type and age of the vehicle for cost-effectiveness.
    • You should also be able to cover the costs of public transportation.
  4. Saving & Investments: While there might be less flexibility than with a higher salary, you should still aim to save a portion of your income. Consider saving at least 10-15% of your salary, but this will be contingent on your personal financial obligations and goals.
  5. Leisure & Travel: Budgeting will be essential, but you should be able to enjoy occasional holidays, dining out, and cultural events. Extravagant holidays or frequent dining out may require more stringent budgeting.
  6. Utilities & Bills: Standard bills like utilities, council tax, insurance, phone, and internet should be manageable. However, it’s essential to shop around for the best deals and to regularly review your expenses.
  7. Debts: If you have loans or credit card bills, you’ll need to factor these into your monthly outgoings. Focus on paying off high-interest debts as a priority.
  8. Education & Training: Some budgeting may be needed, but you could still pursue additional courses or training opportunities, especially if they’re related to enhancing your career prospects.
  9. Emergency Fund: This remains an essential aspect of financial planning. You should aim to set aside money for unexpected expenses, targeting 3-6 months’ worth of living expenses over time.

To make the most of a £40k salary:

  • Budgeting: Tracking your finances is vital. Tools like YNAB (You Need A Budget) or budgeting apps like Snoop and Money Dashboard can be helpful.
  • Smart Shopping: Utilise deals, cashback websites, and avoid making purchases on impulse.
  • Limit High-Interest Debt: Pay off high-interest debts, and avoid accumulating more.
  • Retirement Planning: Even if it’s a small amount, make regular contributions to a pension scheme, especially if your employer offers matching contributions.

Here’s a good video that discusses average salaries in the UK:

How to Budget a £40k Salary?

Budgeting a £40k salary effectively involves understanding your after-tax income, allocating for essential expenses, and setting aside money for savings and investments. Here’s a basic guide:

  1. Understand Your Take-Home Pay: First, determine your post-tax monthly income. Deduct income tax, National Insurance, and any other deductions from the £40,000 to get your net income.
  2. List Essential Expenses:
    • Housing: Allocate around 25-35% of your net income for rent or mortgage.
    • Utilities: Set aside 5-10% for water, electricity, gas, internet, and phone bills.
    • Food: Budget 10-15% for groceries and dining out.
    • Transport: If you use public transport or own a car, allocate 10-15%.
    • Insurance: Health, car, life, and home insurance might take 5-10%.
    • Debt Payments: Allocate money to pay off student loans, credit cards, or other debts.
  3. Set Financial Goals:
    • Emergency Fund: Save up 3-6 months’ worth of living expenses in case of unexpected events.
    • Retirement: Contribute to pension schemes, especially if your employer matches contributions.
    • Short-term Goals: This could be holidays, a new car, or any big purchases in the next 1-5 years.
  4. Non-essential Expenses:
    • Entertainment and Leisure: Allocate 5-10% for movies, outings, hobbies, etc.
    • Clothing: Budget around 5% for clothing and personal care.
  5. Savings and Investments:
    • Aim to save at least 20% of your net income. This can be split between immediate savings, investments in stocks, funds, or property, and contributions to retirement accounts.
  6. Review and Adjust: Every few months, review your spending habits. See if you’re staying on track and adjust the budget as needed. Perhaps you’re spending less on transport but more on dining out. Adjust accordingly.
  7. Use Budgeting Tools: Consider using apps or software like YNAB, Money Dashboard, or even a simple spreadsheet to track your spending and savings.

Each person’s financial needs are different. Adjust your spending in each category based on your lifestyle. Aim to live well and save for the future.

Is 40k a Good Salary in the UK? – Final Thoughts

A £40k salary in the UK typically supports a good lifestyle, covering basic costs like housing, transport, and fun.

It also lets you save for the future. But individual needs and local costs can change this.

Review your goals and lifestyle to see if £40k fits your needs. Manage your money well and get financial advice if needed.

This way, you can use your £40k salary best and plan for a secure financial future.


Is 40k a year middle-class UK?

Yes, a £40k annual salary in the UK would typically place an individual within the middle-class bracket, especially when considering national median wage levels. “Middle class” often encompasses factors beyond income, such as education, occupation, and values. In terms of earnings, £40k would align with a middle-income range for many regions, although the cost of living, particularly in areas like London, can impact the associated lifestyle3.

Is 40k a good salary for a 25-year-old UK?

Yes, for a 25-year-old in the UK, a £40k salary is considered quite good, being above the average for that age group4. At this income level, a 25-year-old could cover essential living costs, save, and potentially invest. The exact standard of living it offers can vary based on location, personal expenses, and financial commitments, but it provides a strong foundation for future financial growth.

Is 40,000 a good salary in London?

Earning a salary of £40,000 in London can generally be considered a good income that allows for a comfortable lifestyle However, it is important to keep in mind that the cost of living in London is high, and the amount of disposable income you have will depend on your lifestyle and expenses. If you are London-based, you may find my guide ‘What is a good salary in London?‘ useful.

Is 40k a good salary in Scotland?

Earning a salary of £40,000 in Scotland can generally be considered a good income that allows for a comfortable lifestyle. It is more than enough to live comfortably in Scotland, and it is just above the median wage for the UK. However, the amount of disposable income you have will depend on your lifestyle and expenses.

Is 40k a low income UK?

No, £40k is not considered a low income in the UK. It’s above the national average salary. However, personal expenses and regional living costs can influence how far this income stretches.

Is 40,000 a good salary UK for one person?

Yes, £40,000 is considered a good salary for one person in the UK. It’s above the national average wage. However, individual living costs and location can affect how comfortable this income feels.

More salary guides:


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Will Fenton is the founder of Sterling Savvy. He is a personal finance expert and writes about trading, investing, budgeting, and other financial topics.

Along with his education in Economics & Finance, he has experience working in the financial services industry in London working for one of the UK’s leading financial companies, “a trustworthy and respected provider of news, education and market analysis for the everyday investor”.

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