Monthly Budget Calculator UK 2025
Enter your monthly income and expenses to see your budget breakdown, surplus or deficit, savings rate, and a visual spending chart.
Monthly Income (after tax / take-home)
Housing
Food & Drink
Transport
Communication
Health
Clothing
Entertainment & Leisure
Children & Pets
Savings & Investments
Other
Enter your income and expenses above to see your monthly budget breakdown.
How to Use the Monthly Budget Calculator
This free UK budget planner helps you build a complete picture of your monthly finances in minutes. Enter your monthly take-home pay and any other income sources, then work through the expense categories. The calculator updates instantly as you type, showing you your total income, total outgoings, the surplus or deficit, and your savings rate as a percentage of income.
The colour-coded spending bar at the bottom breaks your expenditure into categories so you can see at a glance where your money goes. If housing dominates, transport costs are high, or food spending is unexpectedly large, you will see it immediately.
UK Household Spending: What Does the Average Person Spend?
According to the Office for National Statistics (ONS) Family Spending in the UK 2024 report, the average UK household spends approximately £594 per week (around £2,574 per month). Spending patterns vary enormously by household size, region, and income level, but the broad categories below provide useful benchmarks.
| Category | Average Monthly Spend (UK) | % of Total |
|---|---|---|
| Housing (rent, mortgage, council tax, repairs) | £600 – £900 | ~28% |
| Food & non-alcoholic drinks | £280 – £380 | ~15% |
| Transport | £180 – £320 | ~13% |
| Recreation & culture | £150 – £250 | ~10% |
| Restaurants & hotels | £100 – £200 | ~8% |
| Communication (phone, broadband) | £60 – £120 | ~5% |
| Clothing & footwear | £50 – £100 | ~4% |
| Health | £30 – £80 | ~3% |
| Savings & investments | £100 – £300+ | ~5–12% |
The 50/30/20 Budget Rule Explained
One of the most popular budgeting frameworks for UK households is the 50/30/20 rule, originally popularised by US Senator Elizabeth Warren in her book "All Your Worth." The principle works as follows:
- 50% of take-home pay to needs: rent or mortgage, council tax, utilities, groceries, minimum debt payments, and essential transport.
- 30% of take-home pay to wants: dining out, holidays, streaming subscriptions, hobbies, clothing beyond basics, and entertainment.
- 20% of take-home pay to savings and extra debt repayment: emergency fund, ISA contributions, pension top-ups, overpaying a mortgage, or clearing credit card balances.
For someone earning £3,000 per month take-home, this means £1,500 on needs, £900 on wants, and £600 saved or used to reduce debt. Our calculator shows your current allocation across these zones so you can see how close you are to the 50/30/20 ideal.
Building an Emergency Fund First
Before putting money into an ISA or investment account, most financial advisers recommend building an emergency fund covering 3 to 6 months of essential expenses. For a UK household with £1,800 per month in fixed costs, this means accumulating £5,400 to £10,800 in an easy-access savings account.
The best accounts for emergency funds in 2025 are easy-access cash ISAs or high-street instant-access accounts with competitive rates. Check MoneySavingExpert.com for the best rates currently available. Once your emergency fund is in place, additional savings can be directed to stocks and shares ISAs, workplace pension top-ups, or Lifetime ISAs (LISA) if you are saving for a first home.
Council Tax: How It Affects Your Monthly Budget
Council tax is one of the largest fixed housing costs for UK households. In 2025/26, Band D council tax ranges from approximately £1,500 to over £3,000 per year depending on your local authority, which equates to £125 to £250 per month. Single-person households receive a 25% discount.
If you are on a low income you may qualify for a council tax reduction (CTR). Most councils offer reductions of up to 100% for people on qualifying benefits. Always check your local council's website or use Turn2Us to see if you qualify. Many people fail to claim reductions they are entitled to.
Managing Variable Expenses Month to Month
One of the biggest challenges in budgeting is variable costs that fluctuate — fuel, groceries, clothing, and utilities in winter. The best approach is to calculate a 3-month rolling average for each variable category and use that figure in your budget plan. Over time, your average stabilises and becomes a reliable baseline.
For energy bills specifically, you can level out monthly variation by using your energy supplier's "level pay" or "monthly payment" scheme. Your supplier estimates your annual usage and divides it equally across 12 months. This prevents bill shock in December and January. Under the Ofgem price cap system, the cap applies to the unit rate and standing charge, not your total bill — so actual costs depend on how much energy you use.
Reducing Spending: Practical UK-Specific Tips
- Switch energy tariff: Use Ofgem's price cap comparison tool or a switching service to ensure you are on the best available tariff.
- Grocery savings: Buy own-brand or value ranges at Aldi, Lidl, or Tesco. The Which? Consumer Guides show you can save £1,500+ per year switching supermarkets.
- Transport: A season ticket or railcard (26-30 Railcard, Network Railcard) can save 30% on rail fares. Consider cycling or an e-bike for shorter commutes to cut fuel and parking costs entirely.
- Subscriptions: Audit all direct debits. The average UK household has 7 active streaming or software subscriptions. Cancel anything used less than once a week.
- Insurance: Never auto-renew. Always compare at renewal using Confused.com or MoneySuperMarket. Home insurance can typically be cut by 30% or more by switching.
- Free prescriptions: If you need multiple medications, a prepayment certificate (PPC) at £31.25 per quarter covers unlimited prescriptions in England.
Saving for Specific Goals
A good monthly budget does not just balance income and expenses — it allocates money intentionally toward specific goals. Use separate mental or actual "pots" (many UK banks now offer sub-accounts or savings pots) for:
- Emergency fund: 3–6 months essential expenses in easy-access cash
- Annual costs: Car tax, MOT, holiday, Christmas spending — divide the annual amount by 12 and set aside monthly
- Home deposit: Use a Lifetime ISA (up to 25% government bonus on £4,000/year) if buying your first home
- Retirement: Max employer pension match first, then consider a SIPP or workplace scheme top-up
- Short-term goals: New car, home improvements, education costs
Frequently Asked Questions
How do I create a monthly budget in the UK?
Start by listing all your monthly income sources after tax, then list every expense category. Subtract total expenses from total income. If positive you have a surplus; if negative you are spending more than you earn. Use the calculator above to map this out in minutes.
What percentage of income should go on housing?
No more than 30% of your net income is the standard guideline. In London this is often exceeded, with many renters spending 40–50% on housing. If housing costs exceed 35%, look for ways to reduce the cost or increase income to maintain financial health.
What is a realistic monthly food budget for one person in the UK?
A realistic monthly grocery budget for a single person is £150–£250 depending on location and habits. Meal planning and buying own-brand products can cut this to under £150. The ONS Living Costs and Food Survey provides detailed regional averages.
How much should I save each month in the UK?
Aim for at least 10–20% of take-home income. The 50/30/20 rule allocates 20% to savings and debt repayment. If you have high-interest debt, prioritise that first. Always contribute enough to get your employer's full pension match as this is effectively a 100% return.
What counts as a fixed versus variable expense?
Fixed expenses stay the same every month: rent, mortgage, council tax, broadband, phone contracts. Variable expenses change: fuel, groceries, clothing, entertainment. Use 3-month averages for variable categories. Irregular annual costs like car servicing should be divided by 12 and set aside monthly.
Should I include pension contributions in my monthly budget?
Yes. Pension contributions are tax-efficient savings. Workplace contributions are deducted before income tax, so a £100 contribution costs a basic-rate taxpayer only £80 in take-home pay. Treat pension saving as a non-negotiable expense in your budget, not an optional extra.
What is a budget surplus versus a budget deficit?
A surplus means income exceeds expenses — money available to save or invest. A deficit means you spend more than you earn, which is only sustainable short-term using savings or credit. Persistent deficits lead to debt accumulation. Use the calculator to find where cuts can restore balance.