What is a good salary in London? With today’s tough economic situation, this is a particularly pressing question for people looking to work in one of the UK’s most expensive cities. In this guide, I will be revealing how much you need to earn in order to live comfortably in London.
What Is a Good Salary in London?
A good salary in London is around $3,714 to $6,190 per month. In 2022, the average salary in London was $71,067 per year. This is higher than the average salary in the UK, which stands at $47,048 gross income.
The measure of a good salary depends on your specific needs, the cost of living, taxes, the industry you work in, and your level of education. Typically, a $61,905 annual salary is suitable for most people in London. However, you’d need about $74,292 if you have a partner or up to $86,674 annual salary for a family of four.
Factors That Will Determine How Much You Earn in London
Like anywhere else, London employers are happy to offer a high salary for experience and qualifications. Also, an excellent gross salary in London depends on your skills.
Let’s look at some factors that will determine how much you earn in London.
Type of Profession
Tuition and professional qualification fees are higher than ever. However, getting a qualification in certain professions might help boost your gross income. If you don’t have a college degree, here are a few careers with a good salary in London.
- Personal trainer with an average salary of $33,431
- Health and wellness coach with an average salary of $25,133
- Firefighter- firefighters earn an average annual salary of $39,619
If you have a degree, you have more opportunities to earn a decent salary. An average degree holder in London can make a gross salary of $50,379. The best-paying jobs include:
- Veterinary surgeons and other medical practitioners
- Senior managers and chief executives
- Judges- the average wage of a judge is $112,936
- Software developers- earn average salaries of $89,702
Medical graduates have the highest starting gross salary. They make a good income compared to other workers. Full-time employees generally make more than those who work part-time.
Cost of Living
London’s cost of living is higher than in many parts of the world, making it a particularly expensive city. Regular living expenses (food, rent, transportation, and entertainment) cost more in the city. Although many costs will mostly stay the same, things like eating out, rent, and entertainment depend on where you live and you might need more than an average wage.
The most expensive neighborhoods in London include Camden, the City of Westminster, and Islington, while the cheapest places include Havering, Bexley, and Croydon. Generally, the average housing cost for a 900 sq ft. furnished accommodation is $2,355. In expensive areas, however, the rent could be up to $2,666, making housing the biggest expense you will incur.
The average cost of living in London is $3,714 per month. This is a decent salary that should enable you to live comfortably in a middle-class neighborhood. A single person can live comfortably in any area paying for a one-bedroom apartment for around $1,857. If you have a family, you might have to make more money to afford a two-bedroom apartment.
UK law requires that you pay taxes on profits from both self-employment and employment. Some pensions and benefits are charged income tax as well. If you rent out property or get returns from your savings and investments, they may also be eligible for taxation.
The introductory income tax rate in London is 20%. This applies to average earnings between $15,564 and $62,240 annually. However, if you make between $62,241 and $185,715 annual salary, you can expect to pay up to 40% in income tax. You lose tax-free personal allowance when you earn over $123,810 annually.
For every $2.48 that your income exceeds $123,810, you lose $1.54 of your personal allowance. If you earn more than $185,715 annual gross salary in London, you will pay an additional rate which can go to 45%. Generally, people with higher income pay more in taxes.
The way you spend money determines whether or not what you are earning is a good salary in London. If you are one to keep up with the Joneses and thrive in the proper Londoner’s lifestyle, you need an above-average salary. If you know how to save money, you can make minimum wage work and live a comfortable life in London.
London is the city for people that like to go all out. It is also worth noting the high cost of living propelled by the great demand.
The energy in London is a lot like New York City. Everything is fast-paced, and the personality is vibrant. This is why you need an above-average annual salary to enjoy the best of the city’s fashion, food, parties, and nightlife. If you are comfortable with a less lavish lifestyle, you could live on $3,714 or less monthly.
London gets even more expensive when you have a family and dependents. As a single person, you need an annual salary of $49,524 -61,905. Couples can get by with a $74,286 annual salary. With a family of four, you need an average income of $86,667 annual salary to live comfortably.
The average rent of a family home is $3,838 per month. Homes far from the city center cost about $2,352. Most family-friendly neighborhoods come with an extra cost. Flat-sharing may be a good option if you are single or you and your partner are okay with a cramped space. Low earners have to look for shared spaces in cheaper neighborhoods.
Although you would share common space with your flatmates, the costs range from $495-619. The cost is reasonable while considering other expenses council tax reduces your living expenses significantly. Owning a family home in London costs an average of $619,050. Utility bills cost about $433, and childcare costs range from $198 to $409 weekly.
Level of Education
Your education level is one of the most crucial tools when negotiating for a good salary in London—the more industry experience and education you have the higher salary you are likely to get. A master’s degree and at least five years’ experience increase your chances of getting an above-average income.
In addition to your college degree, consider getting other industry-related certifications. They give you a competitive edge and improve your perceived value to employers. Consistent training and advancing your education improves your chances of getting into new careers.
Most entry-level positions require you to have a degree. If you have many high-value skills, you can earn a good income. However, higher education will propel you into better career positions with more money.
Can I Live on $20K a Year in London?
Living on $20k a year in London would be difficult as this is significantly lower than the average wage. Although it is more than the minimum wage, you would need to forgo most luxuries and have a solid financial plan. If you just got a job offer, consider counteroffering this salary for better pay.
What Is a Middle-Class Salary in London?
A middle-class gross salary in London is about $71,067. This is a good salary that can afford you a decent life with basics such as food, housing, and even entertainment. For comparison, the median household income in the UK is around $30,500, according to estimates from the Office for National Statistics.
London is a great place to live and raise a family. However, living in this city comes at a cost. It is one of Europe’s most expensive cities, and you need a proper financial plan to thrive. Luckily, there are many employment opportunities for different industries and careers. A good salary in London depends on your level of education, experience, lifestyle, income tax, and the cost of living.