£40k definitely used to be a good salary, especially outside of London. However, the past 5 years have seen a huge rise in inflation. It definitely doesn’t go as far as it used to. That said, you may be wondering how a £40k salary is compared to the rest of the UK.
In this article, we are going to take a look at the latest government data to see what percentage of the UK earns over £40k. Let’s jump in.
What Percentage Of Individuals In The UK Earn £40k Or More?
The latest UK data shows that earning over £40k per year puts you in the Top 25% of earners in the country. This is the equivalent to the 75th percentile. If you are earning more than £40k per year you are making more than 75% of the working population.
This chart was created from the latest government data on percentile points of the income distribution.
What Is £40k After Tax?
Earning £40,000 per year is a great start but we all know you don’t get to take all of that money home. The government wants their cut in the form of Income Tax and National Insurance.
On a £40,000 salary, you will be in the 20% Tax bracket. We also get a tax-free allowance of £12,570 per year currently. This means you will be paying 20% tax on the remaining £27,430 plus your national insurance contributions.
This means you will pay £5,486 in Tax and £3,991 in National Insurance.
Your Net take-home pay after tax and national insurance payments is £30,523 per year or £2,544 per month.
Is £40k A Good Income In The UK?
Yes, £40k is a good income in the UK. You are earning more than 25% of all earners and are earning around £7k more than the median average salary of £33,280 in the UK. If you live outside of expensive cost-of-living areas such as London you will be able to live a comfortable life especially if you have a partner who is also working.
If you are living in London the £40k starts to become a lot more stretched. You are likely going to have to live in a shared household with a roommate or partner and a large portion (close to 50%) will still go towards your rent. The general cost of living in London is also higher than the rest of the UK.
Overall, if you live sensibly within your budget and invest a portion of your earnings for the future, you should be able to live a comfortable life.
How Can You Earn £40k Per Year In The UK?
Here are ten careers where individuals might earn around £40k per year in the UK, along with brief descriptions:
- Software Developer: Creates programs and applications, working through the entire development cycle, from identifying needs through to testing.
- High School Teacher: Educates students in a specific subject area, preparing and delivering lessons while also assessing student performance.
- Nurse Practitioner: Provides advanced nursing care and treatment to patients, which may include prescribing medication and performing diagnostic tests.
- Data Analyst: Analyses data to identify trends, create visualizations, and provide insights that can help inform decision-making.
- Human Resources Manager: Manages recruitment, develops policies, and ensures compliance with employment laws and regulations.
- Sales Manager: Leads sales teams, develops strategies to achieve sales goals, and works to build relationships with clients or customers.
- Mechanical Engineer: Designs, develops, and oversees the manufacturing of mechanical systems, products, and devices.
- Project Manager: Plans, initiates, and oversees projects, ensuring they are completed on time and within budget.
- Research Scientist: Conducts experiments and research to generate new knowledge in a specific field, which could be in the sciences, social sciences, or humanities.
- Occupational Therapist: Helps people of all ages to overcome physical and mental barriers that are preventing them from doing everyday activities.
Again, it’s crucial to note that salaries can fluctuate based on factors like experience, location, industry, and the specific responsibilities of the role. Some positions might require several years of experience or additional qualifications to reach the £40k mark.
Final Thoughts
Overall, earning £40k per year is a relatively good income compared to most of the UK. It puts you in the Top 25% of earners which is a pretty good achievement. However, “pretty good” shouldn’t stop you from going for more. To enter the Top 10% of earners in the UK, you need to pull in £59,200 per year.
If you’re interested in increasing your income, check out our best ways to build a business online.
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