So, you’ve been offered a job with a £20k salary, or perhaps you’re setting your financial goals for the coming year. Either way, you’re probably wondering, ‘Is 20k a good salary in the UK?’ The answer isn’t as straightforward as a simple ‘yes’ or ‘no’. It’s a bit like trying to nail down the ‘right’ temperature for everyone in a room – it can depend on various factors.

In this post, we’re going to delve into the nitty-gritty of what a £20k salary means in 2023, considering living costs, regional differences, personal financial goals, and lifestyle choices. So, whether you’re a recent graduate stepping into the workforce or an experienced professional assessing your financial landscape, this post is for you. Let’s dive into the numbers and decipher what a £20k salary really means in the UK today.

Is 20k a Good Salary in the UK?

£20k is not a good salary for a full-time job in most parts of the UK.

As of recent data provided by Statista, the median annual wage in the UK is about £33,000. However, this is a national average, which can be influenced by high salaries in particular regions, thereby skewing the median income level.

For instance, in cities like London, the average annual salary is around £42,000, significantly higher than in other regions. This disparity in average salaries across the country brings us to another crucial aspect to consider: the cost of living.

Cost of Living Across the UK

The cost of living varies significantly across the UK. For instance, in the North East, where the average salary is about £29,000, the cost of living, including rent and bills, is typically lower compared to areas with higher average salaries, like London.

Thus, the question of whether 20k is a good salary is relative and depends heavily on where you live. In more rural areas in northern England, Wales, or Scotland, a 20k salary might be more manageable, especially if you’re single and have no dependents.

How Much is 20k After Tax?

A £20,000 salary equates to approximately £17,173 net income after deductions, calculated after removing income tax (£1,486) and National Insurance contributions (£1,341). This means you would be contributing approximately £124 per month towards tax and £112 towards National Insurance. It’s important to note that these are estimates and individual tax situations may slightly differ.

Monthly, Weekly, and Hourly Breakdown of a 20k Salary

Breaking down the 20k salary into more manageable chunks gives a more realistic picture of the earning potential. If you’re taking home £1,431 a month, that equates to:

  • £716 bi-weekly
  • £358 per week
  • £72 per day
  • £9 per hour

Can You Live Off a 20k Salary?

The feasibility of living off a 20k salary in the UK largely depends on your lifestyle, living arrangements, and spending habits. Let’s explore a couple of living scenarios to better understand how a 20k salary could work.

Shared Flat Scenario

If you’re sharing a flat, your share of the rent, utilities, and other expenses could be affordable on a 20k salary. This situation applies primarily to single individuals who can split costs with a flatmate or two. By sharing costs, it becomes easier to manage rent, utilities, food, and even some discretionary spending for leisure or entertainment.

Dual Income Scenario

In a scenario where you’re living with a partner who is also earning around 20k per year, the combined income of £40,000 could allow for a comfortable lifestyle within reason. After accounting for tax and utilities, you could have around £800 per month to spend on food, entertainment, and other personal expenses.

Lifestyle and Entertainment Expenses

Even on a 20k salary, it’s possible to enjoy yourself in an affordable city. Certain cities, like Manchester, offer more affordable dining and entertainment options compared to others like Oxford. However, bear in mind that budgeting and careful spending are key to maintaining financial stability on a lower income.

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

When it comes to housing, a good rule of thumb is to spend around 25-35% of your income on rent.

Rent Affordability: The 25-35% Rule

Based on this rule, if you’re taking home £1,431 a month after tax from a 20k salary, you should aim to spend between £357 and £500 on rent per month.

When discussing rent affordability, it’s important to remember that where you choose to live plays a significant role. With a take-home income of approximately £1,431 per month after tax, you should ideally be spending between £357 and £500 on rent per month, based on the recommended 25-35% of income. In certain expensive cities or neighborhoods, it could be challenging to find suitable accommodation within this range even in flatshares.

Conversely, in more affordable cities in the UK, it’s more likely that you’d find affordable housing options within this budget. For example, cities in northern England generally have a lower cost of living compared to those in the south, so your money might stretch further there. The same applies to smaller towns and more rural areas across the UK.

Rent in Cities: A Case Study of Glasgow

To put this into perspective, let’s consider the city of Glasgow. While average rent prices have increased significantly over the years, reaching around £1,051 in 2022, there are still properties available for less than £1,000. Sharing such a flat with a partner or flatmate would keep your individual share within the affordable range.

Can You Buy a House on a 20k Salary?

While it is technically possible to buy a house on a £20,000 salary, it becomes a significantly more challenging prospect without substantial savings. The majority of mortgage providers lend around 4-4.5 times your annual income, which, in this case, would equate to a mortgage of about £80,000-£90,000. In most areas of the UK, this would not be sufficient to buy a house outright.

If you have a good amount of savings already to use as a deposit, here’s what you need to consider. Firstly, to secure a mortgage, you’ll need to meet several eligibility criteria. These include your credit history, age, and the amount of money you have saved for a deposit. Mortgage lenders also consider your income, so a 20k salary might limit the amount you can borrow.

However, if you and your partner are both earning around 20k, your combined income could make you eligible for a mortgage, provided you meet the other requirements.

In addition to mortgage payments, the costs of buying a house in the UK often include a variety of other expenses such as stamp duty, solicitor’s fees, survey costs, removal costs, and ongoing costs like home insurance, council tax, and maintenance.

Top Tips for Living Off a 20k Salary

Living off a 20k salary can be challenging, but with the right strategies, you can manage your finances effectively.


  • Track Your Expenses: Keep a record of all your expenses, from major costs like rent and utilities to smaller expenses like coffee and snacks. This will give you a clear picture of where your money is going.
  • Prioritize Essential Costs: Prioritize your spending on essential costs such as housing, utilities, groceries, and transportation. Non-essential expenses should be minimized.
  • Create a Monthly Budget: Based on your tracked expenses, create a monthly budget. Allocate funds for each category of expenses and stick to it.
  • Adjust Your Budget: Review and adjust your budget regularly. If you find that you’re consistently overspending in one area, look for ways to cut back.


Building savings on a £20k salary can be challenging but is possible with discipline. Here are some tips:

  • Set a Savings Goal: Whether it’s for an emergency fund, a holiday, or a major purchase, having a goal can motivate you to save.
  • Save First: As soon as you receive your salary, transfer a set amount or percentage to your savings account. This is often referred to as ‘paying yourself first’.
  • Automate Your Savings: Set up automatic transfers to your savings account. This removes the temptation to spend the money.
  • Save on Energy Bills: Consider energy-saving measures in your home, such as using energy-efficient appliances, reducing unnecessary energy usage, and switching to a cheaper energy provider, to significantly cut down on your utility bills.
  • Shop Wisely: Where you shop can make a significant difference in your budget. Opting for budget-friendly supermarkets like Lidl or Aldi instead of pricier ones like Sainsbury’s or Tesco can save you hundreds of pounds a year. If you need to shop at bigger supermarket chains, make sure you’re signed up for their loyalty schemes like Tesco Clubcard, Asda Rewards, and Nectar cards, as they can help make shopping more affordable.
  • Cut Down the Unnecessary: If there’s a streaming service or a monthly subscription you don’t use as much, consider canceling it. Similarly, review your phone and Wi-Fi bills to see if cheaper options are available. Every bit saved can help make living off a 20k salary more manageable.


Investing can be a way to grow your wealth over time, even on a £20k salary. Here are some strategies:

  • Start Small: You don’t need a large amount of money to start investing. Many investment platforms allow you to start with small amounts.
  • Diversify: Spread your investments across different asset classes to reduce risk.
  • Consider Low-Cost Investments: Online investment platforms can be a cost-effective way to start investing. These platforms offer a range of investment options, from individual stocks and bonds to index funds and ETFs. Additionally, many online platforms allow you to start investing with small amounts, making them accessible even on a lower salary
  • Invest Regularly: Regularly investing a small amount can add up over time, a strategy known as dollar-cost averaging.
  • Long-Term Perspective: Investing is a long-term endeavor. Be patient and avoid the temptation to react to short-term market fluctuations.

What is Classed as a Low Salary?

Defining what constitutes a low salary can be somewhat subjective, as it depends on various factors such as location, industry, and personal circumstances. However, in the context of the UK, we can use certain benchmarks to make this determination.

The UK national minimum wage can provide a useful reference point. As of 2023, the national minimum wage for workers aged 23 and over is £10.42 per hour. If you’re working full-time hours, this equates to around £21,630 per year.

Therefore, a gross salary of £20,000 would be below the minimum wage for a full-time worker over the age of 23. Whether this is considered a “good” salary or not can depend on factors such as your location, industry, and level of experience. For those just starting their career or working in lower-paid industries or regions, a salary of £20,000 may be considered adequate. However, for those with more experience or working in higher-paid industries or locations, it might be viewed as low.

Conclusion: Is 20k a Good Salary in the UK?

While it’s below the national average and the minimum wage for a full-time worker over 23, it’s still possible to live on a 20k salary, especially with budgeting and cost-saving strategies.

However, it’s important to remember that “good” is subjective. What works for one person might not work for another, and everyone’s financial situation and goals are unique. It’s always important to assess your individual needs, circumstances, and objectives when evaluating what constitutes a “good” salary for you.

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