Are you recently offered or considering a £60k per year job? It can be challenging to determine whether this salary is considered good or not. With rising inflation and relatively stagnant wages, it’s natural to question the adequacy of your earnings.
In this article, we will explore the actual value of a £60k salary, assess its suitability based on your age, and compare it with earnings in your local area. By examining these factors, we aim to provide a clearer perspective on whether a £60k salary is indeed favorable in your circumstances.
Earning £60k per year puts you in the top 10% of earners in the UK, making it a great position to be in. It provides a comfortable lifestyle outside of London. Although in London, your wage may not go as far, £60k still places you well ahead of the average earner in the city.
How Does £60k Compare To The Median UK Salary?
In the UK the median average salary for full-time workers is currently £33,280. Earning £60k per year means you’re earning a massive £27,720 more than the average full-time worker. Good job, that’s something to be proud of!
If you live in London, £60k is getting to a point where you can start to live comfortably in the city. You are earning £18,134 more than the average Londoner. If you share a house and split rent, you should be able to live in a nice property and put 20% of your earnings away for saving and investing.
Ultimately, earning £60k is a good salary no matter where you live. Even more so if you live outside of London or the South East. It should cover you and your family to live a comfortable lifestyle. If you live with a partner who also works full-time, you should be living a great life financially.
What Is £60k After Tax In The UK?
If you’ve landed a £60k per year job you’re doing great, however you won’t be bringing all of that money home. The government wants their cut, in the form of Tax and National insurance.
On a £60k salary, you will be in the Higher Rate Tax band. This means you will get your tax free allowance of £12,570, pay 20% on income up to £50,720, and finally pay 40% tax on the remaining £9,280.
Many people think if you enter into the higher rate you will pay 40% of all of your income. This is not true. You will only pay 40% on any income above the initial £50,270.
You will pay £11,432 in Income Tax and £5,668 in National Insurance.
This leaves you with a net take-home pay of £42,900 per year or £3,575 per month.
If you have student loan payments, they will also get taken out before your pay hits your account.
Is £60k A Good Salary For Your Age?
Looking at the average median salary for full-time workers across all age groups in the UK, we can see that £60k is significantly more than the average in all age ranges.
|Median Average Yearly
Earning £60k per year at any age is good but it’s especially good if you are in your 20s or 30s. Jobs such as investment banking, dentistry, and law can pay £60k per year in your 30s and 40s.
If you are in your peak earning years and you’re earning £60k that’s a great accomplishment. However, you may feel like you have hit a salary ceiling, only getting small % bumps each year. Looking out for similar jobs at other companies can be a great way to increase your salary or at least get some negotiating power.
Ultimately, at any age £60k is a good salary and is more than enough to live a great life without having to worry about finances. If you’re in London your budget will be a little tighter but hopefully, you will benefit from more future career prospects by living there.
Is £60k A Good Salary Where You Live?
Location plays a massive role in how far your salary will go. Living in a higher average salary area usually comes with a higher cost of living. For example, the average salary in the North East is £29,521 whereas the average salary in London is £41,866.
If you are earning £60k in a lower average salary region in the UK, your £60k is great by comparison.
Earning £60k in the North East is going to give you a much better lifestyle than earning £60k in London. Pound for pound, you are going to get a much better house in the North East vs London. Someone earning £60k in the North East also has the option to keep their expenses very low and invest heavily in their retirement.
Earning £60k outside of London means you’re on a very good salary. With this income, you can enjoy a great life, go on vacations, and save a significant amount for your retirement.
Can You Live In London On £60k Per Year?
With an annual income of £60k, you can comfortably afford to live in London. This amount surpasses the average Londoner’s earnings by £18,134. It enables you to secure a decent flat, indulge in occasional dining out and entertainment, all while responsibly setting aside 20% for retirement savings.
Although average wages in London are approximately 30% higher than those in the North East, the soaring rent prices, which are about 300% higher, significantly reduce the disposable income of many Londoners compared to individuals residing elsewhere in the UK.
You should be comfortable on £60,000 per year in London but it will be hard to save more than the typical 20% of your take-home pay. We recommend living with a room mate to try and cut down on living costs.
Budget Template For £60k Salary
£60,000 is considerably more than most people in the UK earn. However, that does not mean you can just spend your money recklessly. People who have bad money habits when they are earning a little, tend to keep those bad habits even when earning a lot. We want to make sure that’s not you.
Using a budget to track your spending is the best way to see exactly where your money is going each month.
On a £60k per year salary, you are bringing home £3,575 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 the budget 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
|Utilities & Insurance
|Entertainment, Clothing etc
|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 £60k Salary
Housing costs typically represent a significant portion of our expenses in life. With a £60k salary, you should be in a comfortable position to consider buying a house once you have saved up for the deposit.
If you’re young, I highly recommend adopting an aggressive savings approach to enter the property market. This may require temporarily reducing expenses on vacations and luxury items for a few years. However, the long-term benefits will be substantial. By saving £800 per month, you can accumulate a deposit of £20k to £30k within 2-3 years.
When initially renting a property, it’s advisable not to aim for the largest and most expensive house within your budget. Remember that your first rental is temporary, so consider opting for a more affordable option. This allows you to allocate more funds towards savings and expedite the process of purchasing your own home.
How Much To Spend On Rent With A £60k Salary
When it comes to renting, a good guideline is to allocate around 30% of your net take-home income towards housing expenses. For instance, with a £60,000 salary, you can aim to spend approximately £1100 per month on rent.
However, if you reside in a high-cost-of-living area like London or the Southeast, you might need to stretch your housing budget a bit further. In other parts of the UK, you should be able to find a suitable house for around £1000 per month.
Another effective strategy is to consider finding a housemate or partner to share your living space with. This way, you can halve your housing expenses and save up for your own place at a faster pace.
Can I Get A Mortgage On A £60k Salary?
Earning £60k annually in a stable job makes you eligible for a mortgage, providing an excellent opportunity to consider purchasing a house outside of London. If you are buying a property with a partner, your borrowing capacity will increase significantly compared to applying alone. To begin the process, it’s advisable to save up a deposit of 5% to 10%, with 10% being preferable if feasible.
Typically, mortgage lenders allow borrowers to borrow around 3.5x to 5x their pre-tax income. With a yearly salary of £60k, you could potentially secure a mortgage of approximately £240,000. Assuming an interest rate of 6%, this would result in a monthly payment of £1,439 for a 30-year mortgage.
However, it’s important to note that this exceeds our recommended budget of £1100 per month. It’s essential to consider additional expenses associated with homeownership, such as insurance, council tax, and maintenance costs. If I were purchasing a house alone, I would aim for a mortgage of no more than £180,000, resulting in a monthly payment of £1,079 under the same terms.
On the other hand, if you have a partner with a full-time income, your household could comfortably manage a mortgage of £240,000, offering a more manageable monthly payment.
How To Become Financially Free On £60k Per Year
If you live outside of London, you should not be struggling to live on a £60,000 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. You will likely need to make some adjustments based on your own personal situation.
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 £60k 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 have 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 or 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 £60k salary, this is likely around £1900 per month. You should aim to save £11,400 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.
£60k is considered a great salary for individuals in the UK, placing you among the top 10% of earners based on your pre-tax income. It’s an impressive achievement, but it shouldn’t discourage you from striving for further success. In London, this salary can adequately cover your living expenses and create opportunities for significant income growth.
Moreover, this income is more than sufficient to support a family while also saving for retirement. If you have a partner, your combined earnings will enable you to enjoy a highly comfortable lifestyle.
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