Is 25k A Good Salary In The UK?

Sammie Ellard-King

I’m Sammie, a money expert and business owner passionate about helping you take control of your wallet. My mission with Up the Gains is to create a safe space to help improve your finances, cut your costs and make you feel good while doing it.

£25,000 a year is a below-average salary compared to wages across the UK but, in most cases, is more than enough to support yourself and your family.

If you live in London, this wage will be challenging, being £17k under the average salary for London, so you’ll need to budget, find bargains and make intelligent financial decisions.

If you live in the North, £25,000 a year will go much further. If you live in a rural area, costs are much lower than in cities and towns.

If you want to find out the answer to ‘is 25k a good salary in the UK’, then read on as we break it down.

Is 25k a good salary?

A 25k salary is below the nation’s average for a full-time employee.

The average yearly wage for full-time workers in London in 2022, according to Statista, was £41,866, compared with £29,521 for workers in North East England, which was the lowest in the United Kingdom in 2022.

The average wage in the UK across the entire country is £33,000, so if you’re earning £25,000, you’re £8000 a year below the average.

£25,000 usually means you will or currently work in an entry-level or lower-tier management role like a team leader or supervisor within a larger team. These roles can be taken on with little to no experience and therefore are easier to get hold of when applying for jobs.

It does, however, depend on the type of work you take on as a starting teacher would expect £20,000, but a starting GP doctor would expect around £30,000.

For someone working in consumer services like a flight attendant or at a bank, £25,000 is what you might expect for a starting salary.

Only 24% of people in the UK get a job in the subject they studied, so a vast majority start out on a lower wage and increase over time with experience.

What is 25k after tax (and before)

Let’s break down a 25k salary, so you know your earnings by the day, week or month.

Please note this net wage is calculated based on you being younger than 65 with no benefits, pension contributions or student loans.

Gross income of £25k per year equals:

£12.01 per hour
£96.15 per day
£480.77 per week
£961.54 bi-weekly
£2,083.33 per month

Estimated Net Income after income tax and national insurance contributions

£10.11 per hour
£80.862 per day
£404.31 per week
£808.62 bi-weekly
£1,752.01 per month

Please note that bonuses are taxed the same way as your monthly paycheck. If you’re on £25,000, you’d need a bonus of £15,000 or more to fall into the higher tax bracket.

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Can you live off a 25k salary?

The short answer is yes. You can live off 25k. We’re not going to lie and say it won’t be a struggle, but plenty of families make this salary work.

Many variables are in play for each individual or family, such as location, number of dependents, total household income, total household debt levels and ongoing monthly expenses.

These variables will always be unique to each person; therefore, only you will know if you can live off 25k.

If you’ve been on a higher salary and are taking a pay cut down to £25,000, your outgoings are likely to be much higher.

In this case, you may not be able live off £25,000 and would need to rearrange your finances and lower your expenses to suit your new salary.

How much rent can you afford on a 25k salary?

If we’re looking at your income after tax, you should be able to afford something in the range of £550-£750.

If you’re in London, or a major UK city, you’d be lucky to get more than a room in a shared house as rents are expensive. In this case, buddy up with a partner or group of friends to get more bang for your buck.

When I was renting, I always tried to keep my rent as low as possible without compromising quality and space. Knowing how much rent you can afford is a huge factor in keeping your monthly budget in check.

Usually, this is around 30-40% of your monthly salary and operating within this bracket will mean you have enough money to pay for bills and daily expenses.

There isn’t just rent to factor into your monthly expenses; you will need to consider all other household bills. It’s vital to check the price of these in advance as they will differ hugely depending on the area.

Your local council sets council tax fees; water and electricity will vary per location.

We always say a budget is essential, but it will be vital if renting on £25k, as every penny will likely count when it comes to the end of the month.

In the North of England, this will go a lot further and, in some places, can even get you a one-bedroom apartment if in the city or a two-bedroom house if slightly more rural.

Can I buy a house with a 25k salary?

Yes, there are certainly ways you can buy a house on a 25k salary, but it’ll be challenging, and you’re likely to need a big deposit for banks to give you a mortgage.

Try buddying up with a partner, family member or friend on a joint mortgage to increase your affordability.

Usually, in the UK, you can x5 your yearly income before tax, which is how much you can afford. According to onlinemortgage.co.uk, you could afford somewhere between £80,000 – £110,000 if you have a 10% house deposit.

If you freelance, this amount could change as lenders are less favourable to people who run their businesses or operate as sole traders.

Usually, you would need two years plus of profit showing tax returns and the more you have, the more likely you are to be approved.

Regarding location, £110,000 is unlikely to get you much when buying a house, so if you’re on your own, then a shared or part ownership is an excellent way of getting on the ladder.

This helps increase your affordability as you’re only buying 30-40% of the house rather than the full wack.

Tips for how to live off a 25k salary

Sometimes we need to make it work, and if 25k is your salary, then that’s what you have to do.

This section looks for tips to help you stretch your paycheque further.

Create a budget

We all know we should budget, but 82% of us don’t bother. That’s proved by over 72% of us getting into debt to make it to the end of the month.

By doing a budget, you become financially responsible, and if you’re struggling with cash each month, it can help identify savings or potential cutbacks.

Understanding your outgoings allows you to assess your current financial situation and plan for more significant purchases or life decisions.

You can find many seriously great budgeting apps, printables or even spreadsheets online to help you. We’ve also built our own smart money budget sheet, which you can get a copy of below.

Our smart money budget sheet helped me go from £20,000 in debt to buying a house in just over three years.

Take your financial planning to the next level with our Ultimate Financial Planner – just £14.99.

Create a bulletproof budget with categories for income, expenses, debts, development and more.

Save when you shop

The average weekly food shop is on the rise so being careful where you shop helps make your money go further every month.

Shopping at places like Aldi and Lidl, which are still good quality, can save you £300-500 a year just by shopping there. This number goes up if you have a bigger family to feed.

Saving when you shop also counts for other types of shopping, for example, clothes and electronics.

Use cashback apps like Topcashback or Quidco to get extra money off your purchases. Sometimes, you can get up to 10% back on larger purchases!

Pay off debt

If you’re earning £25,000 a year or any amount, you should be looking to pay off some debt. Debt is the most significant factor stopping you from making better financial decisions.

Targeting any high-interest debt first is a crucial first step so that you can reduce your payments faster. Paying interest for something is just criminal, and why give the big banks more of your money?

You could use the money you saved from cashback apps and put this towards debt!

Many of us pay the minimum balance, and whilst this is contributing, you’re often just paying back the interest. The key is to overpay to get on top of it. You’ll feel so much better if you do!

Grow your savings

Savings are part of every financial strategy. Building yourself an emergency fund is a great place to start, and most people say this should be six months’ worth of pay, but three months is a great place to start.

If you struggle to save, use technology to help you. We’ve made a list of the best money-saving apps you can get started with immediately.

One great feature I use is round-up technology. It’s particularly great if you could be better at saving money as it rounds up your purchases to the nearest pound. The good thing about this is that it’s automatic saving, so you barely notice it, and it quickly builds up

Saving for something important?

Let the latest technology help get you there with the best money savings apps.

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FAQs

Is 25k a year middle class?

25k a year would see you as working class in all areas of the UK, and it is an above-average wage that allows you to live comfortably. No official amount makes you into a class, but with £25,000 being slightly below average, this would make you a lower-middle or working-class individual.

What areas are best to live on a 25k salary?

Yorkshire
Scotland
Wales
Lancashire
Thanet

Is a 25k salary good for a single person?

If you’re single and have relatively no debt, 25k is an okay salary. This will give you a roof over your head but require you to make smart financial decisions to get by.

Conclusion

Is 25k a good salary in the UK? We’ve established that it depends on where you live, your financial situation and many other variables.

You can make 25k work! Even in the capital, if you’re supporting a large family on just this wage, we now know it can be challenging, but there are ways to make your money go further.

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Disclaimer: Content on this page is for informational purposes and does not constitute financial advice. Always do your own research before making a financially related decision.