Is £20k a Good Salary in the UK?

This article tells you what life is like in the UK on a salary of £20k per year. I’ve spent over ten years working in the UK, from part-time jobs during uni to graduate jobs. I’ve experienced all types of salaries so I can tell you what you’ll get for £20k.

£20k is a low salary in the UK. In some areas of the country, you can just barely make ends meet. If you earn £20k, consider starting a side hustle to improve your income.

How Does £20k Compare to the Average UK Salary?

The easiest way to see how much a £20k salary is worth is to compare it to the average. Because the salary distribution in the UK is unequal, the median is the most accurate value. (Many people work minimum-wage jobs, and a few earn exorbitant salaries.)

The median salary for full-time employees in the UK 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

An income of £20k per year is at least £10k below the average. Someone with a salary of £20k earns around £800 less per month than the average person. Based on this, £20k is not a high salary.

Read more about what is a high salary.

Is £20k a Good Salary in London?

A salary of £20k is less than half the average in London. Thus, it is not a great salary. It is about the average salary for unskilled workers in London. Typically, an entry-level job pays better if you have a degree.

This does not mean you cannot live on a salary of £20k in London, though. Because of how taxation works, you get a higher proportion of your money than someone earning £42k.

How Much Is £20k After Tax?

If you have an annual salary of £20k, you’ll receive a net salary of £17,624. This equates to £1469 per month or £339 per week. Your exact amount differs depending on extra deductions or allowances.

Your salary is under the student loan repayment threshold. If you have a student loan, you don’t need to repay it until your salary increases.

Salary	Yearly	Monthly	Weekly
Gross salary	£20,000	£1667	£385
Income tax	£1486	£124	£29
National insurance contribution	£890	£74	£17
Net salary	£17,624	£1469	£339

How Much Can You Afford on a £20k Salary?

1. Renting

In the UK, the rule of thumb is not to spend more than one-third of your salary on rent. A salary of £20k would give you £500 to spend on rent every month. If you want to stay within this recommendation, you can about afford a room in a shared house.

If you want a flat, you’ll need to exceed this advice. The average rent for a one-bedroom flat outside London is £863 per month. This is doable on a salary of £20k but requires some budgeting skills.

In London, a salary of £20k would not be enough to rent a flat. Rooms in house shares start at around £600, so you would be limited to sharing.

2. Buying Property (Mortgage)

Buying a house or a flat would be challenging. You can only get a mortgage of up to £90,000. (The exact amount you get depends on your credit score and other factors.)

You can only buy property in the less desirable areas of the UK. There are still hidden gems in the country where you can find a nice property for reasonable prices. You have to be flexible regarding the location, though.

Another way to buy a house or a flat is to have a large deposit or help from your parents.

3. Food

The average food cost for a man in the UK is £250 per month. For a woman, it is £191 per month. You should have enough money to afford an average diet. This is unless you overspend on housing or other areas.

Although you should have enough to cover food costs, you likely need a budget. This way, you avoid running out of money before the end of the month.

4. Other Costs

If you spend typical amounts on housing and food, you might have around £300 left for other expenses. The amount you have left depends on your lifestyle.

Travel, health-related, and personal costs likely take much of your leftover money. You’ll need to budget carefully.

5. Savings

On a salary of £20k, saving is difficult, especially in London. Still, try to put away small amounts. Even £10 per month is better than saving nothing.

If you struggle to save money, try an automatic saving app. These apps round up your change when you make a purchase. Some apps can also automatically calculate how much you can afford to save.

Example Budget

This is how I lived when I earned £20k. Your expenses may differ, but you can use this budget as a template.

Expense	Budgeted Money
Monthly net income	£1667
Needs
Rent/mortgage	£600
Utilities	£200
Food	£300
Personal care (clothes, etc.)	£50
Transportation	£100
Wants
Take-outs	£50
Entertainment	£100
Savings for holidays	£100
Savings (long term)	£167

Can You Raise a Family on £20k?

Raising a family on a salary of £20k may be difficult. With the average cost per year of a child being £11,000, you would lose over half your salary. Of course, you can raise a child on much less, but you also want to consider what kind of lifestyle you can offer them.

You would need a partner with an income at least equal to yours. You may also be eligible for child benefits, which can lower costs.

Are You Rich if You Earn £20k per Year?

There is no clear definition of what being rich is. Most people associate it with a salary of £200,000. Thus, someone on a salary of £20k per year would not be rich.

Yet, someone on a salary of £20k can still be wealthy. Being wealthy means having a high net worth, meaning a lot of savings or owning valuable assets. This is not linked to your salary.

Is £20k a Good Salary in the UK? Summary

A salary of £20k per year is low in the UK. It is at least £10,000 below the UK average. In London, £20k is less than half the average. However, £20k is still a salary someone could live on. It would require some budgeting, but you can live a happy life on this salary.

Read next how someone on a salary of £30k would fare.

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