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This post tells you how good a salary of £100k is in the UK. Whether you have a job offer or are considering a career change, you should know what your salary gets you. If you don’t, you might make poor choices or struggle to make ends meet.
I’ve lived in the UK for over ten years. Things have changed since I arrived, and £100k isn’t as much as it used to be. Yet you’re still fortunate if you earn this much, as shown below.
💡 Quick Answer: Is £100k a Good Salary in the UK?
A salary of £100k per year is great in the UK. It is over three times the national average and puts you in the top 4% earners. Even in London, the UK’s most expensive area, earning £100k enables you to have a good lifestyle.
People earning this salary are likely experienced and in senior positions. These jobs include company directors, bankers, and lawyers. A salary of £100k is not unreachable, but you’ll need to work your way up.
How Good Is a Salary of £100k in the UK?
£100k is a great salary. The average wage in the UK is £33,000. Split by region, the average is as follows:
- London: £42,000
- South East: £34,000
- Scotland: £33,000
- East: £33,000
- West Midlands: £32,000
- South West: £31,000
- North West: £31,000
- Wales: £31,000
- East Midlands: £30,000
- Yorkshire: £30,000
- Northern Ireland: £30,000
- North East: £30,000
As you can see, a salary of £100k is more than three times the average in many regions. It puts you within the top 4% of earners. You earn more than 96% of people in the UK.
Is £100k a Good Salary in London?
London is the most expensive area in the UK. A good living standard costs 58% more in London than in the rest of the UK. A survey showed that you would need an income of £65,000 per year to live comfortably in the capital.
Earning £100k, you are exceeding this recommended income by £35,000. Your income level means you should be able to live well on your salary. Beware, though, six-figure salaries are nothing out of the ordinary in London. You’ll meet plenty of people who earn much more.
How Much Is £100k After Tax?
After taxes, you get £67,050 on a gross salary of £100k. Per month, this would be £5587 and £1269 per week. You may receive a different amount depending on your extra deductions or allowances.
For example, you’ll see less of your paycheck if you repay your student loan. You also likely contribute to your pension, meaning you have less spending money.
| Type | Yearly Salary | Monthly Salary | Weekly Salary |
|---|---|---|---|
| Gross salary | £100,000 | £8333 | £1923 |
| Income tax | £27,432 | £2286 | £528 |
| National insurance contribution | £5518 | £460 | £106 |
| Net salary | £67,050 | £5587 | £1289 |
In the UK, you pay tax depending on your income level. The tax bands are as follows:
| Band | Taxable Income | Tax Rate |
|---|---|---|
| Personal allowance | Up to £12,570 | 0% |
| Basic rate | £12,571 to £50,270 | 20% |
| Higher rate | £50,271 to £125,140 | 40% |
| Additonal rate | Over £125,140 | 45% |
Earning £100k per year, you are a high-rate taxpayer. Your tax rates are as follows:
- No tax on the first £12,570
- 20% on the next £37,700
- 40% on the final £49,730
Compare this to the tax paid on a £200k salary.
How Much Can You Afford on a £100k Salary?
You may wonder what lifestyle someone earning a salary of £100k per year can afford in the UK. Of course, this differs depending on a person’s circumstances, location, and family. Below is some general guidance.
Renting
The Office for National Statistics recommends not to spend more than one-third of your income on rent. This guidance means you can spend £2450 per month. If you earn a salary of £90k, you could spend £2250 on rent.
In many areas of the UK, you can rent a house for less than this. With £2450, you could rent a luxury property outside London. In London, you can afford to live in the most expensive areas. You could generally rent a three-bedroom flat, but in some regions of London, you may only be able to rent a studio.
Buying a Property
With a salary of £100k, you could get a mortgage of up to £450,000. Including a 10% deposit, you can afford to buy a property valued at up to £500,000. Your actual mortgage might be lower depending on individual factors.
The average price for a detached property in the UK is £495,804. However, prices vary widely depending on:
- Location
- Condition
- Size
- Building materials
- Extras
London’s twice-as-high property prices also skew the average. With £500,000, you cannot afford a mansion, but you can buy a decent, good-sized home, even in London.
Food and Bills
Considering what you will likely spend on rent or mortgage, you should have more than enough money to cover food costs and bills. An average UK household spends £4124 per year on groceries. On a salary of £100k, you should be able to afford this easily.
Saving
You should not live paycheck to paycheck if you earn £100k per year. Adhering to the 20% rule, you should save £1667 of your monthly salary. The more you save, the better.
With this savings rate, you will likely save more money than you need. You can invest money you don’t need Immediately. Consider using a financial advisor to help you make the most of your money.
What Should Your Budget Look Like?
Your budget will depend on your circumstances. Following the 50/30/20 rule, you should spend:
- 50% on your needs
- 30% on your wants
- 20% on savings
Based on this allocation, your budget could look as follows:
| Expense | Budgeted Money |
|---|---|
| Monthly net income | £5587 |
| Needs | |
| Rent/mortgage | £1800 |
| Utilities | £400 |
| Food | £300 |
| Personal care (clothes, etc.) | £143.50 |
| Transportation | £150 |
| Wants | |
| Take-outs | £200 |
| Entertainment | £600 |
| Savings for holidays | £876.10 |
| Savings (long term) | £1117.40 |
The table above is for guidance only. I recommend saving more if you can.
Frequently Asked Questions
Can You Raise a Family on £100k?
Yes, you can raise a family on a salary of £100k per year in the UK. You should not have any problem being the sole earner for a family of four or five. Of course, your financial situation would be even better if your spouse had an income.
Are You Wealthy if You Earn £100k?
Being wealthy means having a high net worth. Net worth is the sum of your assets minus your liabilities. Assets include property, investments, and expensive possessions. Wealth is not related to your salary.
However, earning £100k annually gives you a good chance of becoming wealthy. There is no clear cut-off for qualifying as wealthy, but many consider a net worth exceeding £1 million as wealthy. This would be ten years’ worth of salaries for you.
Is £100k a Good Salary in the UK? 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. People in the UK earning £100k per year are also high-rate taxpayers.
With £100k, you can buy property or rent houses almost anywhere in the country. You only find limitations when you want to buy or rent in the more expensive areas of London. Overall, you can live comfortably on this salary.
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