Is £100k a good salary in the uk?

Ed Wilkinson -

A salary of £100,000 per year is considered very good in the UK. The average annual salary in the UK in 2023 is around £30,000 & people earning over £80,000 are in the top 5% of earners.

However, the cost of living can vary widely depending on where in the UK you live. For example, living in London or other parts of the South East is generally more expensive than living in the North or in Scotland. Housing costs, in particular, can be a significant factor in your cost of living.

Even in expensive areas, a £100,000 salary would afford a comfortable lifestyle, though how comfortable depends on one's personal circumstances, financial responsibilities & longer term considerations including saving for retirement. For example, if you have a large family to support, significant debts, or other financial obligations, your money may not go as far as it would for someone without these responsibilities.

Calculation (Annual / Monthly)


Gross Salary: £100,000 / £8333.33

Tax Free Amount: £12,570

Taxable Amount: £87,430

Tax at 20%: £7540
Tax at 40%: £19,892
Total Income Tax: £27,432 / £2286

National Insurance: £5518.60 / £459.88

Take Home: £67,049.40 / £5587.45

Savings

General Savings

The 50/30/20 Rule - experts suggest spending 50% of your income on essentials, 30% on your optional things you want, leaving you with a target 20% to put into savings for a ‘rainy day’ or home refurbishments, a holiday or a new car for example.

Retirement Planning

A Good rule of thumb suggested by experts is to divide your age in half & save that amount into a pension as a percentage of your gross income. If for example you are 40, you should be investing 20% of your monthly income in a pension with the aim of achieving a final pension pot on retirement of ten times your average salary.


Cost of Living

The cost of living in the UK can vary significantly depending on several factors including the region, the size of the household, lifestyle, and personal circumstances. Here’s a general overview of living costs in the UK as of 2023:

Housing

  • Mortgage: National average of £1200 per month for a terraced house up to £3000 for a detached house. Regional monthly mortgage payments can vary widely, in the north east for example the average is £800 per month increasing to £2650 in London
  • Utilities & Council Tax: The current average for a 3 bedroomed house for electricity, gas & water is a little under £300o per annum or £250 per month. In addition there is council tax which can range from an average of £100-200 per month.

Food and Groceries

  • Groceries: Averages between £200 to £300 per month per person, depending on dietary habits.
  • Eating Out: A meal at an inexpensive restaurant may cost around £20 to £30, while a three-course meal at a mid-range restaurant could range from £40 to £80 per person.

Transportation

  • Public Transport: A monthly pass can cost between £65 to £150, depending on the city.
  • Car: Insurance, fuel, and maintenance can add up to around £200 to £300 per month.

Other Expenses

  • Internet: Around £20 to £40 per month.
  • Mobile Phone: £30 to £60 per month for an average plan for airtime and device.
  • Leisure and Entertainment: Varies widely, but could be around £50 to £200 per month.

Education

  • Schooling: Public education is free, but private schooling can range from £10,000 to £30,000 per year.
  • University: Tuition fees for UK students are capped at £9,250 per year for undergraduate courses.

Total Estimated Monthly Costs

  • Single Person: Around £1,500 to £3,000
  • Family of Four: Around £3,000 to £6,000

Please note that these are rough estimates and actual expenses can vary. Additionally, inflation, economic changes, and personal circumstances can have a significant impact on living costs. It is always a good idea to do thorough research and potentially seek advice from financial advisors for more accurate and personalised information.


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