You got a job offer of £26k salary. Now you wondering if it is 26k a good salary in the UK?
The short answer is, it depends. A salary of £26k can go a long way in north-side cities. But in expensive cities like London that may not cover your basic living cost.
Therefore, in this article, we cover all the aspects of living on a 26k salary in the UK. Like groceries, transportation, rent, mortgage etc.
Is 26000 a good salary in the UK?
Defining a “good salary” depends on your lifestyle and location. However, for most people in the UK, £26k can be a decent salary. When you begin your career after college, this is the salary you can expect.
The average annual salary of full-time employees is around £33,000 in the UK. But, in London, the average annual salary is £41,866 according to Statista. That means in expensive cities like London, 26k may not be enough to cover your expenses.
You can also determine whether 26k is a good salary or not, by looking at average pay for your profession. If you get well above the average, then this is a good salary for you.
Best places to live on a 26k salary in the UK
- Durham
- Liverpool
- Stirling
- Cardiff
- Newcastle
What is £26000 after tax?
At £26000 per year, you will fall into the 20% income tax bracket in the UK. This means you will pay 20% tax on your income over £12,500. Your total tax bill will be around £4,297, leaving you with an annual take-home pay off £21,702 or £1808 per month.
We do the tax calculation on the basis of your salary. We are not including any kinds of other incomes and deduction. Like student loans, pensions, or other deductions. Here is a breakdown of the tax deductions on the salary of £26000:
| Yearly | Monthly | Weekly | Daily | Hourly | |
|---|---|---|---|---|---|
| Gross Salary | £26,000 | £2,166 | £500 | £100 | £13.33 |
| Taxable Salary | £13,430 | £1,119 | £258 | £51 | £6.89 |
| Income Tax | £2,686 | £223 | £51 | £ 10. | £1.38 |
| National Insurance | £1,611 | £134 | £30 | £ 6 | £0.83 |
| Take-Home pay | £21,702 | £1,808 | £417 | £83 | £11.13 |
Is £26k a good salary for your age?
£26,000 is a good salary for someone who is 22-29 years old in the UK. But it’s important to remember that people of different ages earn different amounts. People in their 40s typically make much more, around £39,491 a year on average. So, £28k may be great for your age group, but it’s not the highest you’ll see in the UK.
The table below shows how salaries change across different ages. So you can see where you stand compared to others!
| Age Group | Annual Earnings |
|---|---|
| 16-17 | £9,969 |
| 18-21 | £20,437 |
| 22-29 | £29,120 |
| 30-39 | £36,405 |
| 40-49 | £39,491 |
| 50-59 | £36,834 |
| 60+ | £32,530 |
Is £26k a good salary compare to every region of the UK?
Your location significantly defines whether 27k is a good salary or not. In regions like the North East of England, where the average annual salary is around £31,200, your £28,000 income can afford a satisfying standard of living. In London, with its £44,370 average salary, the same £28,000 may not be enough to cover your daily expenses. This discrepancy primarily stems from the varying costs of living across different regions.
Look at the table below for a clearer picture of salary distribution and its corresponding purchasing power throughout the UK in 2023.
| Location | Average Salary |
|---|---|
| United Kingdom | £34,963 |
| London | £44,370 |
| South East | £36,560 |
| Scotland | £35,518 |
| East | £34,833 |
| South West | £33,450 |
| North West | £33,036 |
| West Midlands | £33,003 |
| Northern Ireland | £32,879 |
| Wales | £32,371 |
| Yorkshire and The Humber | £31,920 |
| East Midlands | £31,634 |
| North East | £31,200 |
Can you live on 26k salary a year in the UK?
Yes, you can live with a 26k salary in the UK. A 26k annual salary provides a monthly take-home pay off £1,808 after taxes. This is a decent monthly salary in the UK. £1,808 per month can cover your monthly expenses like rent, groceries, transportation, etc. After all these expenses, maybe your leftover money will be very little or nothing. Also, sometimes you face a struggle to live on that salary.
However, in the UK, the cost of living varies depending on your location. If you think of living in London or other major cities with a 26k salary, then it could be tough for you. Because the rent and cost of living are very high there.
Rather than living in big cities, you can choose to live in smaller cities from the north side. Here, the cost of living and rent prices are 10% to 30% lower compared to big cities. Here you can also afford a one-bedroom flat.
While £26,000 is on the lower end of average UK salaries, still you can live on this income. This could be a comfortable salary if you don’t have significant debts or dependents.
Budgeting for a 26000 salary person in the UK
With a £26,000 salary in the UK, your take home will be around £1,809 per month. To live on that salary, you need to do budgeting. Otherwise, unknowingly you fall into debt.
- Housing: Housing costs will probably be your biggest expense. Outside of London, rent for a one-bedroom flat comes around £600 to £1.200 per month. If buying is a priority, then aim for a mortgage payment same as rent.
- Food: You can plan £200-£300 per month for food. But eating outside can increase this bill. Therefore, cooking your own meals can help you to stick with this budget. You can buy your groceries from Aldi or Lidl. These two supermarkets provide you grocery at a cheap price.
- Utilities: You can plan £200-£250 per month for utilities. Utilities bills include electricity bills, water bills, broadband bills, tv licenses and many more.
- Transportation: In the UK, most people commute to work. Therefore, rather than paying every day, you can buy a monthly bus or train pass. It will reduce your transportation costs. The monthly bus or train pass will be around £50-£100. Avoid buying a car. On a 26k salary, it will be tough for you to repay the amount.
- Savings: It’s important to save your money. Try to save at least 5-10% of your income, around £100-£150 per month. This will help you to make an emergency fund.
How much rent can I afford on a £26000 salary?
To determine how much rent you can afford, we followed the 30% rule that many experts advise. On that rule, your rent payment should be no more than 30% of your take-home pay. At £26k per year, your approximate monthly take-home pay after taxes is £1,808. So 30% of £1,808 is £542.
Therefore, on a salary of £26,000, you can afford rent between £500 to £700 per month. In lower-cost areas, you may rent a one-bedroom flat for around £500 to £800 per month. But in more expensive cities like London, a one-bedroom flat may not come into your budget. You can choose the flat share option to live in London.
With some budgeting and financial planning, you can rent a flat on a 26k salary. The lower your rent, the more you’ll have left over for other living expenses.
How much mortgage can I get on a 26k salary in the UK?
On an annual salary of £26,000, getting a mortgage is challenging but doable. You just need to do some budgeting to make this happen. However, as a rough estimate, you can expect to borrow between £100,000 to £150,000 on a 26k salary.
To get a mortgage, you need to deposit at least 10% of the property value. After that, lenders will offer you a mortgage of between 4 to 4.5 times your annual income. So, on £26,000, you can get £104,000 to £117,000 as a mortgage. However, the actual amount will depend on your personal circumstances and the lender’s criteria.
I know, getting a house on that amount is next to impossible. So, you can get help from the UK Govt. They have a scheme for first-time buyers called “Help to Buy”. In that scheme Govt. lends up to 20% (40% London) of the property value and you have to deposit only 5% of the property value.
If “Help to Buy” also does not fulfill your needs, you can take the mortgage with your partner. Two-person income will increase the mortgage amount, even if your partner earns the same or less amount of money.
You can also add a guarantor to strengthen your mortgage application. A guarantor, usually a parent or close relative, agrees to make repayments if you’re unable to. With a guarantor, you may be able to borrow up to 5 times your income.
Tips for Living Well on a £26k salary
Living a decent life with a 26k salary is possible, but you need some financial tips.
Make a budget
The first step is creating a budget that accounts for your monthly income and expenses. List your fixed costs like rent, loan payments, and utilities. Then estimate your variable cost for food, entertainment and transportation. Make sure your total expenses don’t exit your take-home pay. If it crosses, then look at your expenses where you can reduce.
Cook more and eat out less
Cooking at home is one of the biggest ways to save money. You can buy groceries at cheap prices from Aldi or Lidl. Also, buy in-season produce products and look for sales given by supermarkets. Only eating out on special occasions can also help you to save money.
Consider a side gig
If you’re struggling to pay your bills, you can pick a side gig to earn extra income. Drive for a ride sharing service, completing online surveys, or doing freelance work can help you to earn an extra £200-£500 per month.
Take advantage of discounts and freebies
Use voucher codes or other sites for discounted deals. Supermarket loyalty programes can also save money for shopping. Visit free museums and check your local library for free events. Also, check if you’re eligible for any government benefits or tax credits.
Conclusion
So there you have it, living on a 26k salary in the UK. While 26k may not seem like an astronomical salary, it’s still a pretty decent amount of money. For many people, especially those living in London or the South East, £26k may feel tight. But for others in lower-cost areas, that salary could provide a decent standard of living.
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FAQ
Is £26k a good salary for living in London?
For living in London, £26,000 may not be enough for you. While it’s certainly possible if you’re a single person with no debts and dependents. On a 26k salary, you can hardly cover all your expenses. You should choose a flat share option for rent and try to live outside of central London.
What kind of lifestyle can I expect for £26k a year?
On a £26,000 salary, you can likely afford a modest lifestyle with some financial freedom. Things like dining out, cinema trips, and short UK city breaks are possible. But lavish holidays and a large home may be difficult on this pay. Watch your spending and look for ways to cut costs on non-essentials.
Will £26k be enough to support a family?
Supporting a whole family on a 26k salary alone may not be possible. If your partner or spouse also earns an income, it is possible to sustain a household. You can also use Govt. benefits of raising a child.
