£75,000 is considered an excellent salary in the UK at the time of writing, as it’s more than the measured average per person.
However, there’s a few ways of looking at this question, and there are factors that come into play along the way! Let’s take a closer look at the current salary situation in the UK and what might be considered a comfortable wage.
Is £75,000 a good salary in the UK?
When compared with the average UK salary of around £33,000, £75,000 is a very good salary in the UK. It puts you well above the average and above the median! At £75k per year, you’re likely in the top 6% to 7% of income earners in the UK.
However it’s important to note that ‘good’ is a very subjective term. What’s good for one person, might be great for another, or terrible for the third! Ultimately, you have to compare the £75k in relation to what others in a similar role earn, as that’s a good market based benchmark.
The other point to consider is whether the £75,000 salary is sufficient to cover your needs and expenses. We take a look at that point further below.
How much is £75k salary after taxes?
When earning £75k as an individual, your take-home salary after paying income taxes and national insurance is around £52,549 per year, which is equivalent to roughly £4,379 per month.
The table below outlines the big line items in relation to the typical taxes and deductions.
What is the median salary in the UK?
As per the Office of National Statistics of the UK, as of early 2023, the median annual salary in the UK was £26,340, which is equivalent to a median monthly salary was £2,195. This works out to approximately £12.63 per hour.
There are a couple of other ways of slicing and dicing the median salary. You can analyze it by age, occupation, or location. Let’s dive in to each one of those categories quickly here.
What is the median salary by age in the UK?
As per the latest data from the ONS, the median salary by age varies quite dramatically. The highest earners are in the 35 to 49 age group at £30,720 per year, which is £2,560 per month, or approximately £15.75 per hour.
Leaving aside those under-18, the lowest earning category are those in their retirement ages of 65 or over.
What is the median salary by region in the UK?
As one may expect, the ranges are quite wide and not surprisingly, London and its surrounding areas have the highest median salaries. Wandsworth has the highest median annual salary of £40,500 per month. Leicester has the lowest median pay of roughly £22,000 per year (£1,828 per month).
The interactive map below will help you drill down to the data by region.
What is the median salary by occupation in the UK?
As per the latest ONS data, workers in the “Information and Communication” and “Finance and Insurance” industries tend to have the highest median pay. Both are roughly at the £42,000 per year mark.
As one would naturally imagine, other technical, government jobs, or manufacturing and construction jobs tend to be paid above the overall UK median.
The sectors with the lowest median pay are “Accommodation and food service activities” or “Arts entertainment and recreation”.
Is £75k enough to live on?
£75k sounds like a lot as a lump sum – but it’s before taxation, and you’ll receive your salary split across the year. Your individual circumstances will dictate how far this money travels. Therefore the slightly frustrating answer to this question is, as always, ‘it depends’.
Consider your work expenses, household needs, and lifestyle demands. Here are a few factors that can influence whether or not £75k is enough to live on. To put things in perspective, remember that a £75,000 salary will be worth around £52,550 after typical taxes and dues are paid.
Do you have any dependents?
This is simple maths – the more people you have to support, the more money you’ll need. £75k for a single person is likely to offer fairly comfortable living. A single person in the UK can live comfortably on £25,000 to £36,000 of annual expenses.
Even in a single-income household with children and/or pets, you will find it’s a relatively comfortable income as typical households have an annual expenditure of around £36,000. However you may not be able to save much after all expenses.
Where do you live?
Location, location, location – right? If you’re living in London, your expenses are likely to be much higher so your salary in London would need to be correspondingly higher as well to compensate.
But it’s not just about location, the type of home you occupy also has a big impact on your expenses and your income requirements. Do you pay a mortgage on a house or pay rent on a flat? If it’s the latter, £75k is likely to stretch a little further.
Housing prices closer to London are infamously higher than those you’d pay for further north, too. It’s not just commuting costs and congestion charges you have to keep in mind!
What taxes do you pay?
When earning a salary of £75k as an individual, you’ll be subject to various taxes before you can take any money home. This salary level is high enough to cross in to the Higher rate threshold.
Watch out though – if your job gets you big bonuses, you may well end up in the much feared Additional rate bracket.
Beyond this, a wage of £75k will typically push you into the threshold for Class 4 National Insurance if you are self-employed.
Are you carrying any debt?
Aside from a mortgage on your home, do you have any debt? As interest rates rise, carrying consumer debt is like having to pay a constantly increasing tax. Interest rates on credit card debt or car loans can quickly pinch!
Student loan payments must also be considered as you can’t escape that bill.
Before You Go…
In conclusion, whether £75k is a good salary in the UK depends on various factors, as we have seen. However, no matter how much one earns, it is crucial to plan for the long term to ensure financial stability and security. Investing wisely can help grow one’s net worth and provide a safety net for unexpected events.
By investing in stocks, bonds, or real estate, individuals can generate passive income and secure their financial future. Compound interest can turn small investments into significant wealth over time, making it an essential tool for those looking to grow their net worth.
Our whole blog is dedicated to help you get on the path of financial freedom. Feel free to browse around and read through the articles. There are plenty of investment books and podcasts that you can use as a learning resource along the way to help you reach your goal faster.