Someone wondering if 30k is a good salary could be at either end of their professional life. Young entry-level workers and students looking for a career path or retirement planners who want to know that’s sufficient to maintain their desired lifestyle after work.
Whether £30,000 is a good salary depends on many factors such as age, family size, desired lifestyle, where you live in the UK, and job responsibilities. You can live off that with a modest lifestyle but it falls below the average income in 2024.
In fact, the average UK salary is now around £38,000 with recent pay increasing substantially to keep up with high inflation. This makes 30k seem rather underwhelming in comparison but that number doesn’t represent most people because the average is exaggerated by bonuses and top earners such as FTSE 100 company CEOs who earn over 118 times the average worker.
30k after tax
£30,000 is what you earn before tax but £24,422 is what you actual get paid after tax each year. This is £2,035 a month after 20% tax is automatically applied to your income after your £12,570 personal tax-free allowance and National Insurance contributions. Here’s the full breakdown:
|2024 Take-Home Pay
When budgeting what kind of lifestyle you can afford, make sure to use the actual amount after deductions! Reaslistically, if that 30k a year after tax includes paying the standard 4% of salary into a pension fund, take home pay reduces to £23,662 and again to £23,422 with student loan repayments for a bachelors degree.
When is 30k a good salary?
If you’re a entry-level worker or young professional then 30k is a good salary. ONS data shows the average annual salary between ages 18-21 is £22,932 which increases to £30,316 between 22-29. So, if you’re below 30 years old that’s a pretty good place to be.
If you live in cheaper areas in the UK, cost of living is more manageable because your money goes further. The biggest expense is housing, followed by transportation and food. Living in the Midlands, Scotland, or tucked away towns can save you £5500 to put towards building up your net worth, shopping or memorable experiences. Alternatively, if you live with your parents you could save £10,000 to £12,000 a year to spend on a used German car brand, regular holidays, takeaways, and going out to events. If you’re more money savvy, you can invest it or save for a downpayment for a house you can later rent out for profit to increase your income.
Similarly, when sharing costs with a partner you may still be able to save several thousand if you’re frugal but otherwise you could probably enjoy your lifestyle but won’t have much left at the end of the year. In this case, you’ll likely want to mortgage rather than rent so you can continue to grow your wealth.
Following the 50/30/20 rule for sensibly managing your money, a monthly budget would look something like this:
- 50% for Needs = £1,017.50
- 30% for Wants= £610.50
- 20% for Savings = £407.00
That will typically get you a shared house or studio flat in a moderate area or a one bedroom apartment in a worse area and give you enough to pay for food, utilities and infrequent transport. On the one hand, you’ll have enough to indulge in typical activities such as pubs, restaurants, clubbing, shopping, and going for coffee, but you also have to be very conscious of your expenses as there’s little room to overspend. Overall quality of living is fairly basic when living on your own and requires two salaries with a partner to be truly comfortable.
When is 30k a bad salary?
When you want to live alone in a nice home and area you’re going to have trouble finding somewhere to rent. A stylish place with ample space is going to start from £1200-2000 in popular cities and countryside locations, which is above your budget. London is especially expensive and best for living when earning 50k and over.
If you are a compulsive shopper £610 monthly budget for all your wants doesn’t go very far. Everything has increased in price and you’ll find paying for high value items such as phones, laptops, cars in debt instalments the only feasible option.
If you’re over 30 years old and £30,000 is the high end of the pay bracket in your job, you are going to fall further into poverty as time goes on because inflation will likely increase at a faster rate than your wages.
When rent prices increase, it may be difficult to come up with the extra money and you get evicted. This can be a strain on your mental health when one major incident such as a car repair, job redundancy or interest rate hike can put your livelihood at risk.
A high pressure job with long hours and constant stress is not worth it in the long run. You may have to keep a bad job until you find something better but a lot of responsibility, for example, in a senior role should come with 40k in many occupations.
If you want to start a family it won’t be easy getting a place with enough rooms so everyone has enough space without feeling suffocated. On top of that you’ll want to be in a nicer area so your children are eligible for a good school.
How much rent can I afford on 30k in the UK?
Your annual income should be 30 times the monthly rent so you could pass the affordability check to rent a £1000 a month house or flat. It doesn’t mean you should but if you prioritise your budget on accommodation then it’s possible. Generally, an apartment is cheaper to live in because there’s less associated costs and space to maintain, although you do lose some privacy. Outside London you should be able to get your own space, sometimes with 2 or 3 bedrooms.
Can I Buy A House in the UK On A £30k Salary?
How much you can borrow depends on factors such as age, income, credit score, and deposit amount. As a general rule of thumb, you can get a mortgage 4.5 times your salary, which allows you to buy a £135,000 home. As of October 2023, the average house price is £287,782 so you won’t get a great place. However, a flat in an up and coming area is a good alternative. The right investment will grow in value and you may then refinance your mortgage or sell it to climb the property ladder.
How to live better on 30k
Move to North England or Scotland
In 2023 the average house price in Scotland was £189,000 and rent is roughly £300 cheaper than the UK average. Yet, it’s home to mesmerising countryside and vibrant cities nearby such as Edinburgh. In North West England areas near Manchester and Liverpool are still reasonably priced. You could even move abroad to Asia, South America or Spain/Portugal for hot weather and an affordable lifestyle while remote working.
Whether you decide to live with parents, a partner, or friends, group sharing always bring down the cost of living being able to split housing and utility bills.
Save and invest
Dedicating 20% of your salary to savings may not be of great value keeping the money in your bank but you can spend is wisely so it makes you even more money. For example, the compound interest on stock investments can make you hundreds of thousands over a 30 year period without needing to outperform the stock market. Equally, buying assets that grow in value from property to bitcoin to other productive money drivers such as online businesses.
Start a side hustle
It may take some of your spare time up but with the best side hustle ideas you can use your skills, interests, networks or social media to diversify your streams of income. This not only gives you control to make extra when you need it, but provides a contingency if you ever lose your job or want to transition into another career.
Live near your workplace and local amenities
If you pick the right location you can get away without paying travel costs that often set many people back £2000-5000 a year. If you can walk to the local shop, gym, café, and your office the savings will be huge. Even better if you pick a job that can be done remotely.
Buy knock off brands when food shopping
Food is a major expense and the well known brands charge a premium on their popularity. The supermarket copy cat items are usually 80% as good and much cheaper, which can chop 20-50% off the food bill.