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.
£40,000 is an excellent salary and, in most cases, is more than enough to support yourself. It is just above the median wage for the UK, slightly below London’s, but it will all depend on your current financial situation and how many dependents you have.
If you live in London, you could expect £40k to go quite a long way but compared with the North, a £40,000 salary will go slightly further. You can expect it to go even further if you’re rural and based in the North.
If you want to find out the answer to is 40k a good salary in the UK, then read on as we break it all down.
Table of Contents
Is 40k a year a good salary?
A 40k salary is above the nation’s average for a full-time employee.Â
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 £40,000, you’re £7000 a year above the average.
If you’re leaving university or going straight to work from school, you tend to start slightly lower than this.
£40,000 usually means you work in either a mid-tier or lower management position and, therefore, will typically have some experience to get to that level.
For example, a junior doctor would start out on around £28-30k a year, and someone in consumer services would be slightly less.
Only 24% of people in the UK get a job in the subject they studied, so a vast majority will be paid less when leaving university.
Breaking down a 40k salary
Let’s break down a 40k 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 £40k per year equals:
- £19.23 per hour
- £153.85 per day
- £769.23 per week
- £1,538.46 bi-weekly
- £3,333.33 per month
Estimated Net Income after income tax and national insurance contributions
- £15.01 per hour
- £120.09 per day
- £600.46 per week
- £1,200.92 bi-weekly
- £2,602.01 per month
Please note that bonuses are taxed similarly, so if you receive one, you must know what tax bracket it makes you fall into.
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Can you live off a 40k salary?
The short answer is yes. You can live off 40k. By any means, it’s not a tiny amount, and it’s how you use it that matters most.
Many variables are in play, such as location, family size, household income, debt and monthly expenses. This will always be unique to each person; therefore, only you will know if you can live off 40k.
If you’ve been on a higher salary and are taking a pay cut, you may be accustomed to a higher amount meaning your outgoings may be much higher.
In this case, you may not be able live off £40,000 and would need to rearrange your finances to suit your new salary.
How much rent can I afford on a 40k salary?
You can find a decent room or place, but it depends a lot on your expenses. There isn’t just rent to factor in here, as you will need to consider household bills like council tax, gas and electricity too.
Remember things like the internet, mobile phone, insurance and transport bills. It all adds up, so it’s essential to budget for these costs before you work out your available cash for rent.
Usually, it’s around 30-40% of your salary for rent. Try to keep this as low as possible. Operating within this bracket should leave you some cash each month if you manage your finances correctly.
Considering your monthly income after tax, this bracket is around £800-£1000. 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 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 on a 40k salary?
Yes, you can buy a house with a 40k salary, but it’s much more work to get something you’d want. Generally, you would like to pair up with someone so your affordability increase.
That being said, if you have a big enough deposit, you could get what you want on a £40k salary.
According to onlinemortgage.co.uk, you could afford somewhere between £175,000 – £220,000 if you have a 10% house deposit.
Usually, in the UK, you can x5 your yearly income before tax, which you can afford. If you live with your partner and add to a joint mortgage, your affordability would increase if your partner works.
It’s important to note that if you freelance, this amount could change as lenders are less favourable to people who operate as sole traders or run limited businesses.
Depending on where you buy £200,000 can go quite a long way. In London, you’d be lucky to find anything at all, but if you’re looking in more rural areas, then flats are a great option and even small cottages.
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Tips for living off a 40k salary
Sometimes we need to make it work, and if 40k is your salary, then that’s what you have to do.Â
This section looks for tips to help you stretch your paycheque further.Â
Budget
Let’s face it budgeting isn’t cool, but it is vital! Without one, you’re playing guesswork with your hard-earned cash. While this may work for some of us, for most, it doesn’t.
If you struggle to make your paycheck stretch to the end of the month, then a budget can help you solve this.
Understanding your outgoings allows you to assess your current financial situation and plan for more significant purchases or life decisions.Â
You can find many seriously great budgeting apps, printables or even spreadsheets online to help you.Â
Save when you shop
We all know that Aldi and Lidl are the cheapest supermarkets but did you know that you roughly save £300-500 a year just by shopping there? That number increases if you have a family.Â
Just a simple trip to the local supermarket can add up. We all have been there in the Sainsburys local when you get to the cashier, and one bag of food is £30.
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.Â
Pay off DebtÂ
If you’re earning £40,000 a year, you should be looking to clear any debts you may have.Â
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?
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!
Use credit cards correctlyÂ
Using credit cards correctly is something I could talk about all day. I’ve done it, so I’m no saint, but now I barely use them for anything other than points or if there’s a cashback offer on something I was already going to buy.
I pay them down immediately – don’t wait. That’s the trap they lure you in, and you spend your life paying down purchase interest. Please try not to do this!
It’s also vital for your credit that you maximise your credit card usage. Agencies like Experian and Equifax will encourage you to keep under 30% of your total credit balance.Â
Doing this shows you’re responsible with debt and can clear it if necessary.Â
My tip is to buy something on it every month. Have a regular bill that you pay, like Amazon Prime or BT. As soon as it comes out, pay it off that day. This will show you’re responsible and help increase your credit score.
If you have credit card debt with interest coming out each month, look to balance transfer onto a new provider and start paying it off.
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.Â
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.Â
I use the round-up feature with my bank to put money aside. This basically takes any purchase and puts the loose change away for me. For example, if I spend £1.50 on something, my bank rounds up the purchase to £2.00, placing the 50p into a savings pot for me.
FAQs
Is 40k a year middle class?Â
40k a year would see you as middle 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 £40,000 yearly is a solid wage.
What areas are best to live on a 40k salary?
- Yorkshire
- Lincolnshire
- CornwallÂ
- Norfolk
- Lancashire
Is a 40k salary good for a single person?
If you’re single and have relatively no debt, 40k is a very good salary. This will allow you to pay your rent, have enough left to enjoy time with friends or family, and even put money away.Â
Conclusion
So, Is 40k a good salary in the UK? We’ve established that it depends on where you live, your financial situation and many other variables.Â
You can make 40k work even in the capital, but if you’re supporting a large family on just this wage, it can become challenging, depending on your situation.Â
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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.
