How much money do you need to live comfortably in the UK?

Ideas about what it means to ‘live comfortably’ can vary from person to person. When it comes to money and comfort, we generally mean standard of living. While perceptions of ‘comfort’ or ‘quality of life’ are subjective, someone’s standard of living is much easier to quantify.

In this article, we consider how much money you need to live comfortably in the UK. The exact amount will vary depending on your circumstances, but the points covered here should give you a good understanding of whether your income is sufficient to maintain a comfortable standard of living.

How much money do you need to live comfortably in the UK?How much money do you need to live comfortably in the UK?How much money do you need to live comfortably in the UK?

The average salary

If you’ve ever found yourself googling ‘what is a good salary in the UK?’ or ‘how much should I earn in the UK?’, you’re not alone. According to recent data, the average full-time salary in the UK is £31,285 in 2021. While that might seem like a lot, it doesn’t include deductions for income tax and national insurance. What’s more, rising inflation means your salary won’t stretch as far as it once did.

As you might expect, salaries vary hugely across industries. The chart below shows the top average salaries in the UK by sector.

Financial and insurance activities £43,508
Electricity, gas, steam and air conditioning supply £43,430
Information and communication £41,552
Mining and quarrying £37,567
Professional, scientific and technical activities £37,246
Construction £34,892
Education £33,910

Source: Statista ‘Median annual earnings for full-time employees in the United Kingdom in 2021, by industry sector’

The region in which you work also has a huge impact on your earnings. Not surprisingly, London has the highest average annual full-time salary at £39,716, followed by the South East (£32,810). Meanwhile, workers in the North East recorded the lowest average salary in 2021, at £27,515 (source: Statista ‘Median annual earnings for full-time employees in the United Kingdom in 2021, by region’).

If you’re earning less than the national average wage, you may still be able to live well on a smaller income – you’ll just need to think carefully about how you spend your money.

The cost of housing

While workers in London have the highest average earnings, bear in mind that it’s also the most expensive city in the UK. Rent and property prices are higher here than anywhere else in the UK. So, how much do you need to earn to live in London? It all depends on how close to the centre you are and the size of the property.

The average cost of renting a one-bedroom apartment close to the centre of London is over £1,600 a month, while a family home could set you back around £3,000 a month. As expected, the price drops if you move further out. Renting a one-bedroom apartment outside the city centre typically costs around £1,200 a month, with a family home costing in the region of £1,900 per month.

So, how do these prices compare to other major cities in the UK? In Manchester, a one-bedroom city centre apartment costs around £849 to rent a month. This falls to £828 in Edinburgh and £650 in Cardiff. Meanwhile, a one-bedroom apartment outside of Manchester city centre will set you back £589 a month, compared with £664 a month in Edinburgh and £483 a month in Cardiff.

The cheapest and most expensive cities to work and rent in the UKThe cheapest and most expensive cities to work and rent in the UKThe cheapest and most expensive cities to work and rent in the UK

General living expenses

There are also significant regional differences when it comes to general living expenses such as travel, food and childcare. It’s thought that a single person living in London will need around £1,500 per month to cover their living expenses and just over £1,200 in Manchester. 

However, with the pandemic pushing inflation to a 10-year high, the cost of general living expenses is rising sharply. Wherever you are in the UK, you can expect to have to pay more for everyday items than you did a year ago. If you’re worried about the impact of inflation on your finances, it’s worth looking into how to protect your savings from inflation.

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How much do you need to earn in the UK for a comfortable lifestyle?

The answer to this depends on your circumstances. As we have established, where you live can affect how much you need to earn to live a comfortable lifestyle. But that’s not the only factor. The number of people in your household will also have an impact. If you have children, your expenses will inevitably be higher and you’ll need to earn more money to maintain a comfortable standard of living. 

While there’s no one-size-fits-all figure, you can use the minimum income calculator to give an approximate idea of how much you need to earn to live comfortably in the UK. As the results show, if you’re a single person with no children you should be able to live comfortably in the UK on a salary of just over £20,000, while a child-free couple could live comfortably on a combined income of around £27,000. 

The ideal income is notably higher if you have children, particularly if they’re very young. As many families will know, childcare costs alone can swallow up a significant proportion of your monthly earnings. 

Here’s a breakdown of what you need to earn to live comfortably in the UK based on your circumstances, although bear in mind that these figures are for guidance only.

Single person (under pension age)

  • With no children – £20,383
  • With one child aged up to one – £44,714
  • With one child aged two to four – £23,844
  • With one child of primary school age – £24,883
  • With one child of secondary school age – £30,863

Couple (combined income):

  • With no children – £27,340
  • With one child aged up to one – £49,714
  • With one child aged two to four – £30,863
  • With one child of primary school age – £31,902
  • With one child of secondary school age – £33,325

Source: www.minimumincome.org.uk

Managing your money

However much you earn, it’s important to manage your finances effectively. This will allow you to enjoy the best possible lifestyle you can without breaking the bank. 

As a starting point, analyse your income and outgoings and then draw up a monthly budget using a budget planner. Doing this means you’ll know exactly what you can afford to spend during the month, which is crucial if you want to avoid getting into debt

And if you haven’t done so already, sign up for online banking. Being able to monitor your account quickly and easily will help you to keep track of your spending and stay within budget.

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Saving money with Raisin UK

You can also make the most of your money by setting up a savings account and transferring a portion of your salary into it every month. If the unexpected happens, for example, the boiler breaks down or you lose your job, a savings pot or emergency fund will help to ensure you have enough money to maintain a comfortable lifestyle – at least in the short-term. 

Regular saving is also vital if you want to afford luxuries such as a foreign holiday or a new car.

Saving money with Raisin UK is simple and easy. All you need to do is register for a Raisin UK Account and choose your preferred partner bank to open an account with. 

Some of the most popular types of flexible savings accounts that allow you to top up your savings and withdraw easily are notice accounts and easy access savings accounts:

Easy access savings accounts offer a good level of flexibility, allowing you to access your savings whenever you like. However, they tend to offer lower rates of interest. 

Notice accounts allow you a degree of flexibility in that you only need to give a short notice period, typically between 30 and 90 days, to your bank to access your savings – plus they typically provide more competitive rates of interest than easy access savings accounts.

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