Have you just landed a £50k per year job or are considering taking one? You might be wondering how that salary actually stacks up against other earners in the UK. With inflation through the roof and wages staying relatively stagnant it’s hard to know how much you need to live, save and have some fun.
Let’s take a look at how much you will actually get from the £50k salary, whether it’s good for your age, and how it stacks up against other people in your area.
£50k is a good salary in the UK. In fact, it puts you in the top 15% of earners and is £16,720 higher than the Median Average salary in the UK. If you live outside of London this salary is more than enough to support yourself and your family. In London, your £50k won’t stretch as far but it is still £8,134 higher than the average salary for Londoners.
How Does £50k Compare To The Median UK Salary?
£50,000 a year is a lot more than the £33,280 Median average salary in the UK. You’re making almost £17,000 more than the average full-time earner in the UK. That’s pretty good.
However, if you live in London the numbers aren’t quite as good. The Median average salary in London is £41,866. Earning £8,000 more than the average is a good spot to be in but as you probably know, the cost of living is much higher.
Ultimately, making £50k a year outside of the capital is considered a great salary by any means. It is more than enough for you and your family to live a comfortable life. Especially if you have another full-time earner in the house. After bills are paid you should have money left over for saving/investing as well as entertainment.
What Is £50k After Tax In The UK?
You have landed a £50k per year job. Well done! However, you won’t be bringing all of that home. The government want their cut which means paying your Tax and National Insurance before you get your cut.
On a £50k salary, you will be in the 20% Tax Bracket. However, everyone gets a free untaxed allowance of £12,570. This means you will only be taxed on the remaining £37,430.
You will pay £7,486 in Income Tax and £5,316 in National Insurance.
This leaves you with a net take-home pay of £37,198 per year or £3,100 per month.
If you have student loan payments, they will also get taken out before your pay hits your account.
Is £50k A Good Salary For Your Age?
When looking at the median average salary broken down per age group, we can see that £50k is considerably more than the average in all age groups.
|Median Average Yearly
If you’re in your early 20s in your first job or have just graduated it’s unlikely that you will land a job paying £50k per year. So, if you have, hats off to you. To get a £50k starting salary at that age likely means you are in a field such as Investment Banking or Law.
If you are in your 30s and are earning £45k, this is a good salary for someone with 4-5 years of on-the-job experience and has now picked up a middle management role. You may find there is more opportunity to climb the ladder in your current company or potentially make a switch to a more lucrative job in the same field.
Ultimately, if you are earning £50k outside of London, you can live a very nice lifestyle while still stacking away a lot of money for retirement. If you’re in your peak earnings years and feel like your salary is capped in your current field, you may consider starting your own business if you want to earn considerably more.
Is £50k A Good Salary Where You Live?
Your location in the UK will have a large impact on how far your £50k salary will go. For example, the average salary in the North East is £29,521 whereas the average salary in London is £41,866.
Therefore if you are earning £50k in a lower average salary region in the UK, your £50k is great by comparison. The lower-earning regions usually also have a lower cost of living.
Someone who is earning £50k in the North East is going to be able to save and invest much more of their pay each month as their household expenses should be much lower. They will also be able to purchase a lot more house for the same price as a house in London.
If you are earning £50k outside of the capital then you should be living a comfortable life, with a holiday each year, and have the ability to save and invest consistently.
Can You Live In London With £50k Per Year?
Yes, you can live in London on a £50k per year salary. This is £8,134 more than the average salary for Londoners. While this is great a significant proportion of your income is still going to go towards rent.
Average wages are approximately 30% more than in areas such as the North East however average rent prices are 300% more in London. This leaves Londoners with very little disposable income after everything is said and done.
While £50k should make for comfortable living in London, it won’t go as far as you might think. Living with a partner or roommate is a great way to massively cut down your living costs.
Budget Template For £50k Salary
£50k is significantly above the average salary in the UK, however, that doesn’t mean you shouldn’t have a budget. If you’re not tracking your spending, you are likely blowing money on a lot of things you don’t really need.
On a £50k salary, you are bringing home £3,100 per month. I have put together a rough budget template below to help you get started. However, everyone’s financial situation is personal so you may need to adjust some figures to suit your needs.
We will follow the 50/30/20 rule. This means roughly 50% goes towards needs, 30% to living life, and 20% to savings/investing.
|Monthly Net Income
|Saving & Investing
If you want to get into more detail with your own personal budget, I would recommend checking out our Monthly Budgeting Google sheet.
Housing On A £50k Salary
Over the course of your life, housing is likely to be one of your biggest expenses. On a £50k salary, you should be able to comfortably buy a house after you have saved up for your deposit.
To save a deposit, I would personally cut back significantly on my entertainment expenses for 2-3 years. If you can save £800 a month, you should have a £20k to £30k deposit in 2-3 years. It will take sacrifices but will benefit you massively in the long run.
When renting initially, I wouldn’t go for the biggest, high-end apartment or house you can find. Realise that your initial housing is temporary and cut back a little. This will make saving that deposit a much easier task.
How Much To Spend On Rent With A £50k Salary
When it comes to renting, the general rule is to spend around 30% of your net take-home income. This means on a £50,000 salary you should be spending approximately £950 per month on your rent.
If you’re living in London or the South East you may need to stretch this a little further. In the rest of the UK, you should be able to find a reasonably nice property for £950 per month.
If you can also live with a housemate or a partner you will save a lot of money vs renting on your own. This will give you more money to contribute to saving for a house or investing.
Can I Get A Mortgage On A £50k Salary?
Yes, you can get a mortgage on a £50k per year salary. This is more than enough to think about purchasing a house. If you are buying with a partner you will be able to borrow quite a bit more. The first step is saving up a minimum of 5% deposit however I would recommend aiming for 10% if you can.
In most cases, you will be able to borrow 3.5x -5x your pre-tax income.
On a £50k per year salary, you will be able to borrow approximately £200,000. With interest rates currently around 6%, this would give you a monthly payment of £1,199 on a 30 Year mortgage.
This is slightly above our recommended housing cost of £950 per month. You also have to factor in insurance, council tax, and maintenance. If I was buying alone I would buy a smaller house in the £170,000 range with a £160,000 mortgage. This would give you a £959 payment on the same terms.
If you have a partner who is also bringing in a full-time income then a £200,000 mortgage becomes much more feasible.
How To Become Financially Free On £50k A Year
If you live outside of London, you should not be struggling to live on a £50,000 per year salary. If you are, you’re making some significant financial mistakes. Here are a few fundamental personal finance rules you should follow to become financially stable.
Create A Budget
Creating a budget is the first step to becoming financially free. Knowing where your money is going each month allows you to be intentional about when you spend money.
You can use the template we provided above to start your budget and customise it to fit your lifestyle.
Get Out Of Debt
If you have any bad debts, your first priority should be paying them off. This might be credit card debt, car payments, personal loans, etc. With high-interest rates, these debts will make you struggle to ever get ahead financially.
Pay off these debts as fast as you can, starting with the highest interest first. Once you wipe out your debt you can start to focus on setting yourself up for financial success.
On £50k per year, you should be able to wipe out most debt quickly. If you have a car that has a £30,000 loan on it and you have no investments or emergency fund, it’s time to sell it and buy something more affordable.
Build An Emergency Fund
Once you cleared your debts, it’s time to start securing your future. An emergency fund allows you to be prepared when things go wrong. If you get laid off at work, your car breaks down you don’t have to stress. This money is specifically there to fix these problems.
You should aim to save 6 months of essential expenses. This is housing, food, and essential bills. For someone on a £50k salary, this is likely around £1700 per month. You should aim to save £10,800 in an emergency fund.
Keep this money in a high-interest savings account and only touch it for ACTUAL emergencies. Even if you lost your job you have plenty of time to find a new one, without having to stress out too much.
Once you have an emergency fund and have wiped out any bad debts, it’s time to start investing. You may already invest some money in a pension each month through a workplace pension scheme. If they offer a match, you should be maxing this out first.
You have a couple of options for investing. If you are planning to invest for retirement and don’t ever plan on touching the money until then, I would recommend investing in a SIPP (Self Invested Personal Pension) due to the tax relief benefits and government bonus.
I personally try to max out my stocks and shares ISA first as I like to have access to the money at any time, in case an opportunity comes up, such as buying rental property or investing back into my own business.
Either way, setting up one of these investment vehicles and investing in simple index funds is one the most popular ways to start investing.
£50k is a great salary for most people in the UK. You are in the Top 15% of earners based on Pre-tax income. That’s something to be proud of, but don’t let it stop you from going after more. If you live in London £50k won’t go just as far due to the high cost of living however living there should give you more opportunity for pay rises in the future.
This salary is more than enough to support a family while also saving for your retirement. If you also have a partner, you should be able to live a very comfortable lifestyle.
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