Is £60,000 a Good Salary in the UK?

What is considered a good salary in the UK is going to vary wildly depending on where you live and the standard of living that you’re looking for. It will also depend on things like whether you have a mortgage and whether you have kids.

Nevertheless, in this article we’ll cover where a £60,000 salary sits in terms of the average for the UK, as well as London, England, Wales and Scotland. We’ll also look at what you can expect to get in your bank account with a £60,000 salary after tax, National Insurance and pension contributions are all taken out.

What is the Average Salary in the UK?

First let’s look at where a £60,000 salary sits in terms of other salaries in the UK. According to the Office of National Statistics (ONS), the median income for full time workers in 2021 was £31,772 p.a. With this figure in mind, £60,000 looks like a very good salary given that it is almost double the national median full time income in 2021.

It’s important to keep in mind that for the ONS, full time work is considered to be anything about 30 hours per week, or 25 hours per week for teachers. Most salaried positions consider a full time role to be around 37.5 hours per week, which means that this median potentially skews slightly to the low side for someone working a 37.5 hour week.

Either way, based on the average for the entire UK, £60,000 is significantly above this figure. These numbers become more useful when we can start to compare them to the various different regions around the country. Obviously you would expect the average income to be higher in high cost of living areas such as London, and lower in more affordable parts of the country.

Breaking down the median annual income for full time workers by region gives us the following figures:

• London - £39,716

• South East - £32,810

• Scotland - £31,672

• East - £30,867

• West Midlands - £30,000

• North West - £29,529

• Northern Ireland - £29,109

• South West - £29,080

• Yorkshire and The Humber - £28,808

• Wales - £28,506

• East Midlands - £28,416

• North East - £27,515

As you can see, the median income varies a lot from the highest to lowest areas, and therefore a salary of £60,000 is most likely going to go much further in the North East than in London. Whilst the level of income doesn’t directly mean that living costs are going to follow the same pattern, it tends to be the reason salaries are higher or lower. For example, it’s no surprise that London has the highest median salary given that the cost of living is so much higher than other areas of the country.

How Much is the Take Home Pay on a £60,000 Salary?

So whilst £60,000 is so far looking like a pretty good salary, it’s also important to keep in mind that you won’t actually see the full £60,000. Yes unfortunately there are a significant amount of deductions that will happen on your payslip before the money actually reaches your bank account.

First, you have Income Tax. On a salary of £60,000 you will be a Higher Rate tax payer. This doesn’t mean that you pay Higher Rate Tax of 40% on your whole salary, but it does mean you will pay it on the last £9,729. Overall, on a salary of £60,000 you can expect to pay income tax of £10,232. 

Next, you have National Insurance Contributions (NICs) which have recently increased in order to fund additional spending on the NHS and health and social care. On £60,000 you can expect to pay NICs of £5,570 per year.

The above figures are also based on making regular pension contributions. This is something that most people should do and something that most people do. This isn’t the same as Tax or NICs, as it is still your money. The difference is that it’s going into your pension pot for retirement, so you still can't access it for your day to day living costs now. Based on a 5% contribution, you’ll pay £3,000 into your pension over the year, and this also does reduce your income tax and NICs which have been taken into account in the figure above.

All in all, after all these deductions you will be left with approximately £41,198 out of your £60,000 salary which breaks down to £3,433 per month. There are other things that can reduce this further, for example things like student loans. If you have a Plan 2 student loan repayment, this monthly take home pay figure would reduce to £3,211 a month.

Will a £60,000 Provide a Comfortable Standard of Living?

This all depends on your definition of comfortable! In this article, we looked at what it costs to live a “Comfortable” lifestyle as defined by the Pensions and Lifetime Savings Association. Now this is probably more aptly described as a Luxury lifestyle, as it involves frequent overseas holidays, near new cars and a sizable grocery and clothing budget.

It will also depend heavily on whether you have children or not. Again, the article breaks down some statistics on the average cost to raise children. Generally speaking, kids are going to be one of your biggest expenses and this is likely to make a big difference on whether you’re comfortable or not! It might seem obvious, but the other big variable is whether your household has more than one income. Because of the way our tax system works, a second income will make a bigger difference than the equivalent increase to a single income.

For example, a £10,000 pay rise for someone on £60,000 will be subject to Higher Rate tax of 40% and NICs. On the other hand, a second income of £10,000 will fall under the Personal Allowance and the NIC threshold and be completely free of tax and deductions.

The most important thing is working out what a comfortable life looks like to you. The best way to do this is to work through your finances, do up a budget and work out what income you need to live a comfortable lifestyle. Now we know that budgeting sucks, so we wrote an article on what you should do instead! You can check it out here.

Summary

£60,000 is a good salary for the UK. It’s significantly higher than the median full time earnings no matter which area of the country you live in, and therefore it puts your personal income at a higher level than many, many others. With that said, everyone will have a different idea of what makes a comfortable life

For some, £60,000 will be enough to provide a comfortable standard of living for a family. For others, it will barely be enough to get by. The most important thing to do if you want to know whether £60,000 is a good enough salary for you, is to work out exactly what amount of money you need to live the life you want to live. If you want to work out what this is for you, this article is a great place to start!