You’ve been offered a job with a salary of £27,000 per year. Now you wonder, Is 27k a good salary or not in the UK?
Therefore, in this article, we discuss whether a salary of 27k is good in the UK, along with tax, rent, cost of living, and others.
Is 27k a good salary in the UK?
27k is a decent salary in the UK. The average salary in the UK is £33,000. That means it is £6,000 below the average salary in the UK. Still, you can afford your necessities like rent, groceries, transport, etc. in the UK.
Whether 27k is a good salary or not depends on your city and lifestyle. If you have modest tastes and live outside of the capital, £27,000 can be a comfortable salary. I understand that £27k is slightly below average, but it’s still a livable amount.
27k Salary After Taxes
On a salary of 27k, you’ll pay 20% in income tax and national insurance contributions. That works out to about £4,615 per year, leaving you with a take-home pay off £22,384.
The tax amount calculate on the basis of your salary. Here, we are not including other benefits and deductions such as pension, student loan and others. Following table show you exact tax collection amount of your salary.
| Yearly | Monthly | Weekly | Daily | |
|---|---|---|---|---|
| Gross Salary | £27,000 | £2,250 | £519 | £104 |
| Taxable Salary | £14,430 | £1,202 | £277 | £55 |
| Income Tax | £2,884 | £240 | £55 | £ 11 |
| National Insurance | £1,731 | £144 | £33 | £7 |
| Take-Home pay | £22,384 | £1,865 | £430 | £86 |
Is £27k a good salary compare to every region of the UK?
£27,000 is a good salary in some parts of the UK, but not for all locations. In the North East of England, where the average salary is around £31,200, your £27,000 income would be just enough to live. And the comparison to England where the average salary is £44,370, the same £27,000 feels like trying to cover a giant bed with a tiny blanket. Because London, like other big cities, is just plain expensive.
Check out the nifty table below to get a better view of average salaries in different resign across 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 |
Is £27k a good salary for your age?
£27,000 might sound good if you’re in your 20s in the UK. It’s definitely not bad! But, salaries in the UK change as you get older. People in their 40s, for example, typically earn more, with an average salary of around £39,500. So, while £27,000 is decent for your age, it’s not the highest you could go over time.
Check out the following salaries table to see where you stand and what might be possible in the future!
| 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 |
Can You Live Comfortably on a 27k Salary in the UK?
On £27,000 per year, you can fairly live a comfortable life in the UK. Living on that salary needs some good budgeting. You also need to compromise in some areas depending on the cost of living in your city or town.
In many places outside of London, a salary of £27k would allow you to live a decent life in the UK. You would have enough for rent, transportation, groceries, and other essentials.
Homeownership at this salary would be difficult unless you have a sizeable down payment. You may need to budget carefully for enormous expenses like a new car or vacations abroad. Your disposable income is fairly limited, so spend wisely and avoid overspending.
Budgeting Tips for Living on 27k salary
Housing
For housing, you have a few options. Renting a one-bedroom flat outside of London would cost you £600-£800 per month. Sharing a house with roommates could lower costs to £400-£600 per month.
If buying, properties under £130,000 are doable with a £27k salary. Look at flats or small houses in the Midlands, North of England or Wales. You’ll need at least a 10% deposit, so save up!
Transport
A monthly rail pass starts around £50-£100. Or if driving, budget £100-£200 per month for fuel, tax and insurance.
Everything Else
Around £200-£300 per month should cover essentials like food, mobile and utilities. Try budget supermarkets, meal prep and energy-efficient living.
How much mortgage can I get with 27k annual salary?
With an annual salary of £27,000, you can get a decent mortgage amount. However, it depends on your credit score and down payment. As a rough estimate, you will get a £120,000 to £150,000 mortgage.
The general guideline is that your monthly mortgage payment should not exceed 30% of your monthly income. At £27,000 per year, your monthly income would be £2,250. So keeping your monthly mortgage payment at or under 30% of that – around £700 per month – is a suitable target.
The exact amount you can borrow depends on the lender and the type of mortgage. With a good credit score and stable income, many lenders will approve a loan of 4 to 5 times your annual income. Some lenders may approve up to 6 times your income for those with excellent credit.
The down payment also affects how much you can borrow. A larger down payment, like 20% or more, will allow you to get a lower interest rate and qualify for a bigger loan.
So there you have it, a realistic view of living on a 27k salary. 27k may not make you rich, but with some careful budgeting, it can provide a decent standard of living in the UK. To make the most of your money, prioritise your spending on what truly matters to you. With the right mindset, 27k can absolutely be a good salary for living a fulfilling life in the UK.
How much rent can I afford on a 27k salary?
With a salary of 27k in the UK, you’ll have a variety of housing options to consider. The general rule of thumb is to spend no more than 30% of your income on rent. For 27k per year, that works out to about £675 per month on rent.
Renting a shared house
Renting a room in a shared house or apartment is an affordable option on this budget. You can find a share house for rent between £400 to £600 per month in many cities outside of London.
Renting a studio or one-bedroom
If living alone is a priority, you may rent a studio or small one-bedroom flat. It costs you around £600 to £800 per month.
Tips for living well on a 27k salary in the UK
Living in the UK on £27,000 a year can be doable if you budget wisely. Here are some tips to keep in mind.
Make a budget
You should track your income and expenses each month. It helps you to see where your money is going each month. Look for expenses you can cut. See if you can cut the cord on cable, reduce energy usage, or spend less on entertainment.
Pay off debt
Interest charges on credit cards, loans, and other debt can cost you thousands of money each year. Make paying off high-interest debts a priority to free up more of your income.
Buy in bulk
For essentials like food, toiletries and household supplies, buy them in larger sizes or go to discounted supermarkets like Aldi or Lidl. It allows you to save money in the long run. Just make sure you have enough storage space and can use the items before their expiry date.
Meal plan
Planning your meals in advance and making a grocery list help reduce food waste and save more money. Buy ingredients that can be used in multiple meals. Cook more at home instead of eating out. You’ll be surprised how much you can save each month.
Look for free activities
Find activities that don’t cost a lot so you have options for entertainment that won’t break the bank. Check your local places for free events, go to national parks and museums, or explore new parks in your city. Keeping yourself occupied in an affordable way will make budgeting easier.
Living on £27,000 in the UK may require some adjustments but with prudent financial habits, you can make it. Make sure to track your spending, reduce debt, buy in bulk when possible, meal plan, and find low-cost entertainment. With time, budgeting on a 27k salary can become second nature.
Conclusion
So there you have it, a realistic view of living on a 27k salary. 27k may not make you rich, but with some careful budgeting, it can provide a decent standard of living in the UK. To make the most of your money, prioritise your spending on what truly matters to you. With the right mindset, 27k can absolutely be a good salary for living a fulfilling life in the UK.
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Disclaimer: All the information provide on this article only for educational purposes. Please don't take it as a salary advice. Please do your own research before making any salary related decisions.
