Whether you're contemplating a job offer, planning for the future, or simply curious about the state of affairs, the question of whether 85k is a good salary in the UK is worth exploring.
In this article, we'll examine living costs, housing, and other factors that can impact the suitability of a 85k salary.
85k after tax in the UK
If you’re on the lookout for a new role or have just landed a job with a 85k salary, here’s an estimate of your wage break down after tax.
- Income tax - £21,430
- National insurance - £6,480
- Take home pay - £57,090
On a salary of £85,000 your take home pay would be roughly £57,090 after tax and NI contributions. This works out at around £4,760 a month and £1,100 a week.
If you need help with your personal tax affairs, a qualified accountant can offer support.
An accountant can also help you set long-term goals and keep your finances on track.
Living costs in the UK
To determine whether a salary is adequate, it's crucial to consider the cost of living.
The expenses one incurs can vary significantly depending on factors such as location, lifestyle choices, and personal circumstances.
Let's explore some key areas of expenditure to evaluate whether 85k is a good salary:
Housing costs, including rent or mortgage payments, tend to be the most significant expense for individuals or families.
It should allow for affordable accommodation options, whether it's renting or buying, in most parts of the country.
2. Utilities and council tax
Utilities, including electricity, gas, water, and internet, are essential expenses to factor into your budget.
Additionally, there is the council tax, which varies based on the value of your property and the local authority.
With a 85k salary, you should have enough income to comfortably cover utility bills and council tax.
The cost of transportation, whether it's commuting or owning a vehicle, is another factor to consider.
Public transportation fares and fuel costs can vary depending on your location and travel requirements.
With a 85k salary, you should have sufficient income to cover transportation expenses without it becoming a significant financial burden.
4. Groceries and dining out
Food expenses are an important aspect of your budget.
While prices can differ, a 85k salary allows for a comfortable grocery budget and the flexibility to enjoy dining out experiences without major financial strain.
5. Leisure and entertainment
Your salary should also provide room for leisure activities and entertainment.
Whether it's going to the cinema, attending concerts, or pursuing hobbies, a 85k salary allows for a reasonable allocation of funds towards leisure activities.
Considering the areas of expenditure mentioned above, a 85k salary generally provides the means to cover living costs comfortably and maintain a good standard of living throughout the UK.
Housing and accommodation
Housing costs can significantly impact the adequacy of a salary, and affordability varies across regions in the UK.
Let's explore the housing options available with a 85k salary:
Renting is a popular choice for individuals seeking flexibility or those who cannot afford the upfront costs associated with buying a property.
With a 85k salary, you should have a wide range of rental options available to you, even in high-demand areas like London.
This salary level allows for more choices and the possibility of securing desirable accommodation.
Buying a property is a long-term investment that offers stability and potential for growth.
With a 85k salary, you should have a good chance of being able to afford a property, including in areas with higher housing costs.
However, it's important to consider additional costs such as mortgage payments, insurance, maintenance, and stamp duty when calculating affordability.
Financial considerations and saving potential
In addition to meeting living costs and housing expenses, it's important to consider your financial well-being and saving potential on a 85k salary.
Here are some aspects to keep in mind:
With a 85k salary, you should have a reasonable ability to save and build a solid financial foundation.
Allocating a portion of your income towards savings can help you establish an emergency fund, plan for retirement, and work towards achieving your financial goals.
2. Pension contributions
Contributing to a pension is crucial for long-term financial security.
With a 85k salary, you should have the means to make regular contributions towards your pension, taking advantage of any employer-matched contributions and tax benefits.
3. Debt management
If you have existing debts, such as student loans or credit card balances, it's important to manage them effectively.
With a 85k salary, you should have enough income to comfortably cover debt repayments and work towards reducing your overall debt burden.
4. Financial planning
Consider working with a financial advisor who can provide personalized guidance on maximizing your earning potential, managing your investments, and making informed financial decisions.
Career progression and future earnings
When evaluating the adequacy of a 85k salary, it's essential to consider your career prospects and potential for future earnings.
Many individuals aspire to progress in their careers, take on additional responsibilities, or seek new opportunities for professional growth.
As you advance in your career, your salary is likely to increase, providing the potential for improved financial well-being.
It's also important to note that salary is just one aspect of job satisfaction and overall financial security.
Factors such as work-life balance, benefits, and personal fulfillment should also be taken into account when assessing the value of a position.
In conclusion - is 85k a good salary?
Earning a 85k salary in the UK is generally considered a good income that provides the means to cover living costs, including housing, utilities, transportation, and leisure activities.
It allows for comfortable accommodation options, whether renting or buying, and offers room for savings and long-term financial planning.
However, it's important to consider individual circumstances, personal choices, and regional disparities that can influence the adequacy of a salary.
It's advisable to assess your own financial goals, lifestyle preferences, and future aspirations when evaluating whether a 85k salary meets your needs.
Remember to make informed financial decisions, manage your expenses wisely, and seek professional advice when needed.
By adopting a proactive approach to your finances, you can make the most of your 85k salary and work towards achieving long-term financial well-being.