London is an expensive city to live in and in general, you would need an annual salary of at least £45,000 to cover living expenses.
However, the latest data puts the average salary in London at £39,700 a year, which is significantly lower than what you would need to lead a comfortable life in the city.
In the article below, we will explain more about what is a good salary in London for singles, couples and families, and what jobs can get you to that level. Plus, we will take a look at how wages in the capital compare to the rest of the UK.
What Is a Good Salary in London in 2022?
As mentioned above if you want to make the capital your home, you need to aim for a salary over £45,000 a year.
- A single person living in London would need about £50,000 a year;
- A couple should be able to get by with £60,000 a year;
- A family of four would need an average income of £70,000 to cover the cost of living in London.
Speaking of which…
How Much Does It Cost to Live in London in 2022?
Judging by the answers of people who actually live in the city, here is a breakdown of the most common costs.
This is one of the biggest costs of living in London.
In fact, Londoners could end up spending as much as 23% of their monthly income on rent, the cost of which rises in direct proportion to the proximity to the city centre.
For instance, renting a family home costs about £3,100 per month in the centre and around £1,900 outside of it. So, some of the best places to live with a family will definitely come with a cost.
In Zone 1 or 2, rent can range from £1,200 (for a studio) to £2,400 (two-bedroom flat). Monthly rent for a one-bedroom flat in the centre costs around £1,500. You could pay less, but then you would have to commute for about an hour to get to work or meet friends in the centre.
Just for comparison rent outside the capital is an average of £1,068.
Flat sharing is a considerably cheaper alternative and costs £400 to £500 a month, although this means that you would have to share the kitchen and common space with your flatmates.
Related: Worst places to live in London
What about owning a home?
Average house prices in London can go up to £500,000, which is double the UK average of £251,500.
What’s more, the median property price to median earnings ratio in the capital is 12.5, so an average Londoner would need 12.5 gross yearly salaries just to buy a medium-priced property.
Considering these prices, it is no wonder that there are over 10.94 million outstanding mortgages in the UK.
Rent is not the only expense, though. Other monthly housing costs include:
- Utility bills: £350, including water, gas and electricity (around £160) and council tax, phone and internet— the latter is a must in the capital where 93% of residents have access to the net.
- Cleaner: Around £10 to £15 an hour.
Socialising & Entertainment
How much of your salary after tax in London should you expect to pay for a night out? Here is how much entertainment costs in the capital:
- Going out for meals two times a week: £350-£400
- Going out for drinks from time to time: 50 to £100 per night (this depends on how much one drinks but a pint can cost £6 in Zone 1, while cocktails can be £10-£12)
- Going out to the theatre: Around £77 for two (could be higher based on the seats you want)
- Going to concerts and shows: £30-£100
- Gym membership: £35-£50
- Books, music, apps, streaming services and hobbies: £300
- Occasional shopping: Around £250
Getting around the city can eat up a huge chunk of average London salaries.
Owning a car
It costs over £3,000 annually to run a car in the UK, with petrol being the biggest expense. In addition to common car running costs, you have to factor in expensive parking (an average of £6.60 an hour) and the infamous London congestion charge (£15 a day).
An Oyster card can set you back around £130 a month, depending on where you live and travel. Bear in mind that public transport may not be cheap, but it is very well organised, which means you can get around without a car, especially if you are single.
Taxis are understandably more expensive. The minimum fare is £3.80 and prices can go up to £8 or £11.20 per kilometre (or even higher).
You can expect to spend around £350 on groceries a month, depending on where you shop. Groceries are more reasonably priced at discount merchants like Aldi and other cheap online supermarkets in the country, while some shops like M&S and Waitrose are typically more expensive.
Going on Holiday
With holidays being the most common reason for travelling abroad, it’s no surprise that Brits spend at least £4,000 a year on vacations across all age groups.
However, thanks to cheap flights and sites like Booking.com and Airbnb, you could end up paying somewhere in the range from £1,000 to £1,500 for holidays abroad twice a year.
A childminder costs about £160 to £330 a week.
On top of that, preschool at a private school can go up to £1,300 for the full day, while private school tuition can cost £10,000 to £23,000 a year, accounting for over half of the average salary after tax in London.
Note: The average private school fee for the rest of the county is £13,700 a year.
Ideally, you should have enough left over to put around 10% of your net salary into some savings account, such as a cash ISA or Stocks and Shares ISA.
How Does the Cost of Living in London Compare to the Rest of the UK?
London is definitely not on the list of cheapest places to live in the United Kingdom. For instance, the cost of living in the capital is 42% higher than living in Manchester.
The cost of living in London is also well above the national average, as can be seen from the following figures:
- A family of four: an average of £4,850 per month in London vs £3,500 across the UK
- A single person: an average of £2,892 per month in London vs £2,000 across the UK
Here is how London compares to other cities in the UK and the world, according to Wise:
|1 bedroom flat in city centre||Transportation||3-course meal for two|
Did you know: Manchester is the best city to live in if you are a freelancer in the UK, based on work opportunities and living costs.
What is the Average Salary in London?
According to Statista, the average salary in London was £39,700 a year in 2021, the highest in the country.
London Average Salary vs UK Average Salary
Meanwhile, the mean average salary in the UK was £31,447 in the same time period.
This coincides with government figures from April 2021 which put the weekly median income in London at £728, or £117 higher than the median for the entire nation.
What is a Good Salary in the UK?
This depends on where you live as naturally more expensive cities like London would require higher income.
However, in general:
- A couple in the UK can have a comfortable life on an annual salary of £27,340
- A single person should make ends meet with £20,383 a year
- Couples with young children would need more, or around £49,714 per year
- Couples with older children should be satisfied with annual pay of £31,902.
How Much Do Londoners Make: Gross vs Net Salary?
Most workers in the UK are paid a gross salary, i.e. the money you earn before deductions, which may include national insurance, income tax, pension contributions and student loan repayments.
You might be interested in: What happens if you don’t repay a student loan in the UK?
How Much Is Deducted From Your Pay Every Month?
National Insurance and Income Tax are the most common deductions made from your salary every month.
National Insurance contributions are required if you want to qualify for benefits such as the State Pension and they are mandatory for all working individuals who are over 16, make more than £184 weekly or are self-employed and make more than £6,515 in profit a year.
- Will there be a State Pension when I retire?
- How does the UK pension compare to other countries?
National Insurance contributions come out to 13.25% of your salary if you make £190 to £967 a week. If you earn more than £967 a week, NI contributions are 3.25% of your pay.
Income Tax is paid on any amount you earn that exceeds your Personal Allowance (set at £12,570 for the 2022/23 tax year).
The income Tax rate is divided into 4 brackets in the UK as displayed in the table below:
|Taxable Income||Income Tax Rate|
|Personal allowance||Up to £12,570||0%|
So, if you earn £50,000 a year, your take-home net salary will be £37,198 (after paying tax and NI). This means you are making £3,100 a month or £715 a week.
If you are interested in more information about tax and NI in the UK, read through this helpful guide.
What Determines a Good Salary in London?
Let’s take a look at what is the average income in London and the UK based on your education level, gender, age and the industry you work in.
The average wage in London for graduates is £37,579 with additional cash compensation of £6,824, Glassdoor estimates.
Postgraduates naturally earn more—according to Totaljobs, the average salary for a person with a Masters or PhD is £47,500 and £57,500, respectively.
The figures across the UK are slightly lower:
- No higher education above A level standard: around £25,000
- Graduates: £34,000
- Post-graduates: £42,000
Gender pay gap (in London and the UK)
Unfortunately, a gender pay gap is noticeable both regionally and nationwide.
Based on data presented by Plumplot, in 2021 women in London earned an average of £43,500, while men made £61,400.
The average salary in the UK for women in the same time period was £33,200 as opposed to £41.5k for male employees.
As expected, younger people earn less than their elders as they are more willing to take jobs that pay less, such as apprenticeship and entry-level positions.
Salaries go down after workers reach a certain age, though, with those over 60 earning £28,854 a year, or 7k less than the highest-paid generation of 40 to 49 year-olds.
Did you know that over 50% of Brits plan on working after reaching the State Pension Age?
In the UK, finance and insurance provides the highest wages for workers with an average salary of £43,821. It is followed by the Energy sector (£42.5k) and Mining (£42.4k).
On the other end of the spectrum is the Accommodation & Food Services, an industry known for paying low wages—here the average salary is £22,779.
In the capital, Finance and Banking is the highest-paying industry witn average salaries of £80,203. Next is Management & Business where London salaries average £76,688 and Law with average wages of £75,827 a year.
What Are the Highest Paying Jobs in London?
Listed below are the top 3 highest paying jobs in the UK and the average London salary for the same positions.
|#||Job Position||Average UK salary||Average London salary|
|1||Chief executives and senior officials||£80,232||£101,292|
|2||Marketing and sales directors||£74,950||£111,741|
What Jobs Bring in the Lowest Average Income in London?
The three lowest paying jobs in the UK by gross weekly pay are:
- Bar staff: £301 a week
- Smiths and forge workers: £303.7 per week
- Waiters and waitresses: £314 a week
The level of experience also determines the average salary. Thus, entry-level jobs in London average around £32,500 across all industries, whereas senior executive positions get paid an average of £70,000, although, in reality, they could go up £100,000 and more, depending on your experience and skill set.
How Do Average London Salaries Compare to the Rest of the UK?
The table below shows the difference in salaries between London and the capitals of Wales and Scotland.
Even though salaries in London are above the national average, they still fall short of the amount one would need to lead a comfortable life in the city.
The cost of living in London is notoriously high, while the number of industries that have kept up with the rising cost of rent, food, and other essentials, remains low. So before you move to London, carefully analyse all living expenses and see if your salary can cover them.
Frequently Asked Questions And Their Answers
What are the highest paying jobs in London?
The highest paying jobs in London are typically in the financial or technology sectors. Investment bankers, software developers, and medical professionals usually have high salaries, as well.
What are the lowest paying jobs in London?
The lowest paying jobs in London are typically in the service industry, including waiters, bar staff, and retail workers.
How does London compare to other major cities in salaries?
London is one of the most expensive cities in the world to live in and although salaries are above average, they don’t always stretch as far, considering the living costs in the city. By comparison, New York City has a higher average salary but lower living costs, while Tokyo has a much lower average salary but higher living costs.
What is the average salary for a job in London?
The average salary in London is £39,700 a year. However, the amount you get can vary depending on your role and the industry you are working in.
If you plan on settling down in the country’s capital, it is advisable to go for jobs that pay more than £40,000 a year. Although to determine what is a good salary in London for your needs, you should calculate your living expenses first.
Bojana is my name and writing is my game. I am a content writer from Bitola who is always interested in the latest research in almost all areas of life. I have a Bachelor’s degree in English literature and a perfectionist character, both of which help me find the most accurate data and information available. Although I have my head stuck in studies and reports most of the time, I still have a bit of free time during which I enjoy knitting and watching classic 90’s Disney movies.
What is considered a good London salary? ›
The cost of living in the city, particularly housing and transportation expenses, tends to be higher compared to other regions in the UK. Taking into account these factors, a salary range of £50,000 to £60,000 per year can be considered a good salary that allows for a comfortable standard of living in London.What salaries are top 5% in London? ›
Verdict. A salary of more than £80,000 a year does put someone in the top 5% of earners, even if they do not necessarily feel wealthy.What is the top 10% income in London? ›
The top 10% of households have an average equivalised disposable income of £70,900 per year while the bottom 10% have an average of £10,600. More details about how these data have been equivalised are available.Is 150k a good salary in London? ›
For many, £150,000 a year is an almost unimaginable amount of money, some six times the average national wage . It's a healthy wage, certainly, better than most, but nothing to get excited about. £50K is a pretty good salary to earn here in the UK. It's significantly higher than the national median wage.What is a comfortable salary to live in London? ›
The average wage that was seen as a sum on which people could live comfortably is £16,300 more than the £33,000 median annual pay for full-time employees in the tax year ending in April 2022, according to Office for National Statistics (ONS) figures.How much money do you need to live comfortably in London? ›
In 2023, for a single person, the average cost of living in London now clocks in at over £3,200 per month. This is around £1,000 more to find per month than the UK average. This means that the annual average cost of living in London for a single person is over £38,000.Are NYC salaries higher than London? ›
According to the NYS Department of Labor (DoL), average annual salaries for New York City have largely risen year-on-year from to $62,310 (£46,633) in 2017. Compared to London in 2017, workers were paid an annual average of £7,157 more in New York City.Is 75k a good salary London? ›
A salary that exceeds £70k is considered to be an upper-middle-class wage. So, those who exceed £75k can definitely consider themselves on the higher end of the middle-class bracket.What are the top 1% salaries in the UK? ›
In March 2023 the top one percent of earners in the United Kingdom received an average pay of 16,754 British pounds per month, compared with the bottom 10 percent of earners who earned 711 pounds.What is upper middle class in London? ›
The upper middle class in Britain traditionally consists of the educated professionals who were born into higher-income backgrounds, such as legal professionals, executives, and surgeons. This stratum, in England, traditionally uses Received Pronunciation natively.
What is the top 1% net worth in London? ›
The wealth of the richest 1% of households was more than £3.6 million, compared with £15,400 or less for the least wealthy 10%; wealth inequality as measured by the Gini coefficient has remained stable over the last 14 years.What salary is middle class UK? ›
Median income for non-retired households decreased by 0.3% in FYE 2022, from £34,100 to £34,000, following a 1.0% increase in the previous year, with an average annual growth of 1.7% in the 10 years leading up to 2022 (FYE 2013 to FYE 2022).Is 100k a big salary UK? ›
A 100k salary is above the nation's average for a full-time employee. The average yearly wage for full-time workers in London in 2022, according to Statista, was £41,866, compared with £29,521 for workers in North East England. A 100k salary will likely be a director's or senior management position at a larger company.Is 200k a good salary in London? ›
Overall, £200k is a good salary to have in the UK. It is six times the national average and even far above average in London. People in the UK earning £200k per year are also additional-rate taxpayers. With £200k, you can afford to buy property or rent houses almost anywhere in the country.Is $120,000 a good salary in London? ›
£120k isn't a huge salary for London. Especially if it's a single salary as it's in the salary spot that takes a beating for tax as over £100k you lose the personal tax free allowance. It's approx £6k per month net. Rents in central London are rising fast.Do you get paid more if you live in London? ›
Living costs are much higher in London than in the rest of the UK - that is why the London Living Wage is higher than the UK rate. Our calculation is based on living costs and when it is annually recalulated we take into account any fluctuation in those costs.How much salary is enough to live in London with family? ›
London is one of the most expensive cities to live in. Knowing that you would need an annual salary of at least £45,000 to cover living expenses. Yet, the latest data puts the average salary in London at £39,700 a year.What is the average living cost in London for a single person? ›
Updated on 21 May, 2023
The average cost of living as a family of four is around $3,135(£2,268) without house rent. As a single person or student, the estimated cost of living per month in the UK is $900(£651) without rent.
The average rent per month for a one-bedroom flat in the UK is £700. In the USA it is $1,169, which works out to around £940 per month, making the UK a clear winner here.How much does it cost to live in London in American dollars? ›
Overall, the cost of living in the U.K. is 0.49% lower than in the United States. Rent overall is about 22.55% lower in the U.K. You would need $4,700 per month to finance a modest lifestyle in London, compared to $5,822 for the equivalent lifestyle in New York City.
Is 100k a good salary in London? ›
Summary. Overall, £100k is a good salary to have in the UK. It is three times the national average and even far above average in London.How much do Americans make compared to the UK? ›
How do salaries compare with the UK? According to the Office for National Statistics, the average UK salary is £26,266, while the latest data from the US Bureau of Labor Statistics shows the average annual wage in the United States is $53,490 per year (about £38,941).Are US salaries higher than UK? ›
In general, wages in the United States tend to be higher than those in Europe, particularly for skilled and high-paying jobs. Part of the reason for this is that the cost of living in the U.S. is usually higher than in Europe. This means that workers need to make more money to keep their standard of living the same.What is the average salary in London vs Paris? ›
To sum up, living in London is around 21% more expensive, than living in Paris. Yet, taking into consideration the average salary, it is also higher in London than in Paris. The average monthly net salary (after-tax) amounts to 2,144.30 € (1,852.37 £) in Paris, and 2,591.28 € (2,238.50 £) in London.Is 90000 pounds a good salary in London? ›
£90,000 is considered a high salary in the UK. With the average salary in the UK being around £30,000 per year, a 90k salary is significantly higher than what the average person earns.How much is a salary of 130k in London? ›
On a £130,000 salary, your take home pay will be £77,597 after tax and National Insurance. This equates to £6,466 per month and £1,492 per week. If you work 5 days per week, this is £298 per day, or £37 per hour at 40 hours per week.Is 80k a good salary in London? ›
According to Statista, the national median income in the UK in 2022 was £33,000 for a full-time position among workers who pay income tax. This means that a salary of £80k is far above the nation's median salary.What is a respectable salary UK? ›
What is a good salary in the UK? Between £2,500 and £3,000 is considered to be an ideal monthly net income in the UK. That salary could support a comfortable life in a city, including a two-bedroom flat, entertainment and leisure.What city in the UK has the best salaries? ›
The UK's highest paid towns and cities
There are no prizes for guessing that salaries are highest in London, where the average weekly wage is £727.
- Programmers and Software Developers.
- Cyber Security Specialists.
- Health Services and Residential Care.
- Graphic Designers.
- Physical Scientists.
- Sales Assistant.
- Operations Manager.
What is considered wealthy in the UK? ›
According to Credit Suisse, individuals with more than $1 million in wealth sit in the top 1% bracket. The UK population was 68.4m people in 2021. According to Credit Suisse, a minimum wealth of $2,685,099 (£2,211,528) is needed to sit within the richest 1% in the UK.Where do middle class Londoners live? ›
It is an established middle-class neighbourhood with excellent schools, sensible houses, and efficient public transportation. While there are a number of million-pound homes in London, you can expect East Finchley to be more affordable.
In the year ending March 2019, the average (median) annual household income in each quintile before housing costs were paid was: top quintile: £54,000. second highest quintile: £35,700. middle quintile: £26,800.Where do rich Londoners live? ›
The richest and most expensive neighbourhoods in London are definitely Chelsea, Kensington, Mayfair, and Knightsbridge! These neighbourhoods are known for their fashionable and expensive shops and restaurants, as well as being home to many of the richest people in the world.Who is the richest girl in London? ›
Denise Coates, Britain's richest woman, has taken a £170m pay cut as growth stalls at her sprawling bet365 gambling empire. Ms Coates' salary fell from £421m to £250m for the year to March 2021, according to filings on Thursday.Why are there so many millionaires in London? ›
Why did the extra-rich settle down in London in the first place? Its financial centre, international outlook and generous tax breaks made it good for business. It's close to continental Europe but also has strong ties with companies across the pond.Is 70k a good salary London? ›
A salary of £70k per year is a high salary in the UK. It is more than double the national average. On £70k, you can afford a high standard of living and buy property in most places.What is a good net worth by age UK? ›
|Household savings by age UK||Average net financial wealth||Median net financial wealth|
|30 to 34||£14,500||£1,000|
|35 to 39||£28,400||£2,800|
|40 to 44||£76,100||£5,000|
|45 to 49||£50,100||£5,300|
The middle class in Britain often consists of accountants, architects, solicitors, surveyors, social workers, teachers, managers, specialist IT workers, engineers, doctors, nurses and civil servants.Is 50 000 a year a good enough salary to live in London? ›
In some areas, particularly major cities like London, the cost of renting or buying a property can be substantial. With a 50k salary, you should be able to secure decent accommodation in most parts of the country, although it might be more challenging to afford a spacious property or live in expensive areas.
What salary is upper class UK? ›
top quintile: £54,000. second highest quintile: £35,700. middle quintile: £26,800.How many Londoners earn over 100k? ›
Survey claims a raft of high-earners and that nearly 50,000 make over a £1m. More than 1.2million people are earning over £100,000 a year, if a new survey of reported incomes is accurate.How many people in UK earn over 150k? ›
Illustrating the gulf between public and private sector pay at senior levels, the Taxpayers' Alliance said in a report earlier this week that only 2,921 people employed by local authorities in 2020-21 received more than £100,000 in total remuneration and 739 received over £150,000, 46 more than the previous year.Is 120k a good salary in London? ›
£120k isn't a huge salary for London. Especially if it's a single salary as it's in the salary spot that takes a beating for tax as over £100k you lose the personal tax free allowance. It's approx £6k per month net. Rents in central London are rising fast.What is the top 1% salary in the UK? ›
In March 2023 the top one percent of earners in the United Kingdom received an average pay of 16,754 British pounds per month, compared with the bottom 10 percent of earners who earned 711 pounds.What is the average salary in the US vs UK? ›
How do salaries compare with the UK? According to the Office for National Statistics, the average UK salary is £26,266, while the latest data from the US Bureau of Labor Statistics shows the average annual wage in the United States is $53,490 per year (about £38,941).Is it cheaper to live in London or New York? ›
Cost of Living NYC vs London
Consumer Prices in London are 16.52% lower than in New York, NY (without rent) Rent Prices in London are 30.45% lower than in New York, NY. Restaurant Prices in London are 13.79% lower than in New York, NY. Groceries Prices in London are 37.92% lower than in New York, NY.
The calculation above shows that, after tax, a gross income of £85,000 per year in 2023 leaves you with £58,350 taken home. This is equivalent to around £4,862 per month. There is about 31 pence taken away for taxes and national insurance contributions from every pound earned.