The answer depends on where you live, your lifestyle, your career stage, and your goals — but there are clear data-backed thresholds that most financial experts use to define what is "above average", "good", "very good", and "exceptional" in the UK labour market.
Defining a "Good Salary": The Key Thresholds
Take-Home Pay at Different Salary Levels (2025/26)
Gross salary tells only part of the story. After income tax and National Insurance, what you actually receive can be significantly lower. The table below shows estimated monthly and annual take-home pay at a range of salary levels for a standard employee with the personal allowance of £12,570, no student loan, and no pension deductions:
| Gross Salary | Monthly Take-Home | Annual Take-Home | Effective Tax Rate |
|---|---|---|---|
| £25,000 | £1,750 | £21,000 | 16.0% |
| £30,000 | £2,000 | £24,000 | 20.0% |
| £35,000 | £2,300 | £27,600 | 21.1% |
| £40,000 | £2,562 | £30,744 | 23.1% |
| £50,000 | £3,120 | £37,440 | 25.1% |
| £60,000 | £3,603 | £43,236 | 27.9% |
| £75,000 | £4,312 | £51,744 | 31.0% |
| £100,000 | £5,579 | £66,948 | 33.1% |
| £125,000 | £6,310 | £75,720 | 39.4% |
| £150,000 | £7,333 | £88,000 | 41.3% |
Note that salaries between £100,000 and £125,140 are subject to the personal allowance taper — your tax-free personal allowance of £12,570 is reduced by £1 for every £2 earned above £100,000. This creates an effective marginal tax rate of 60% on earnings in this band. Above £125,140, the full 45% additional rate applies.
What Is a Good Salary? By Cost of Living
A key insight often missed in salary comparisons: a "good" salary is relative to what you need to spend. The same £40,000 salary buys very different lifestyles depending on where you live in the UK.
Typical Monthly Costs in the UK (2025)
| Expense | UK Average | London | Manchester/Birmingham | North East/Wales |
|---|---|---|---|---|
| Rent (1-bed flat) | £1,285 | £2,121 | £1,050 | £700 |
| Utilities + broadband | £300 | £330 | £290 | £270 |
| Food and groceries | £350 | £420 | £330 | £300 |
| Transport | £300 | £180 (TfL pass) | £100 | £200 |
| Car (finance + insurance + fuel) | £400 | N/A (many don't own) | £400 | £350 |
| Entertainment / dining | £250 | £400 | £220 | £180 |
| Total (no car, London) / Total (car, regions) | - | ~£3,451 | ~£2,390 | ~£2,000 |
What This Means for Different Salary Levels
In London at £40,000: Monthly take-home is approximately £2,562. Against estimated costs of £3,451 (living alone), this leaves a significant monthly shortfall unless you have flatmates or live outside zone 2. Most professionals earning £40,000 in London use flatshares to make the finances work.
In Manchester at £40,000: Monthly take-home of £2,562 against costs of approximately £2,390 leaves around £170/month surplus — tight but manageable, with some capacity for saving into a pension or ISA. At £50,000 (take-home ~£3,120), you have comfortable headroom of around £730/month.
In the North East at £35,000: Take-home of approximately £2,300 against monthly costs of around £2,000 leaves a £300/month surplus — reasonable for the area, where the median salary is only £33,000. A salary of £35,000 represents a genuinely comfortable income in many parts of the North East and Wales.
What Is a Good Salary by Region?
| Region | "Good" Salary Threshold | Rationale |
|---|---|---|
| London | £60,000+ | Housing costs make £60,000 the practical comfort threshold for living independently |
| South East (excl. London) | £50,000+ | High commuter belt housing costs; median is £39,860 |
| Manchester / Birmingham | £40,000+ | Regional median around £35,000; £40,000 gives good headroom |
| Leeds / Sheffield / Bristol | £38,000+ | Growing cities with rising but still manageable costs |
| North East / Wales / Northern Ireland | £33,000+ | Regional median is £31,500–£33,000; modest surplus at this level |
| Scotland (Edinburgh) | £45,000+ | Edinburgh housing costs rising sharply; otherwise Scotland is affordable |
Good Salary by Career Stage
What constitutes a good salary also depends heavily on where you are in your career journey. Entry-level salaries in 2025 vary enormously by sector, from £18,000 for some retail management graduate schemes to £50,000 for competitive investment banking roles.
| Career Stage | "Good" Salary Benchmark | Notes |
|---|---|---|
| School leaver (18–21) | £22,000–£27,000 | Above minimum wage, in skilled apprenticeship or entry role |
| Graduate (22–25) | £28,000–£35,000 | Competitive graduate starting salary; sector dependent |
| Early career (26–30) | £35,000–£45,000 | 2–5 years experience; good if above £40,000 |
| Mid-career (30–40) | £45,000–£70,000 | Management or specialist level; median for 30–39 is £42,000 |
| Senior / Director level (40+) | £70,000–£120,000+ | Senior management, partner-level or C-suite |
What Salary Do You Need to Buy a House in the UK?
Mortgage affordability is one of the most practical definitions of a "good salary." Most high-street lenders apply a multiplier of 4 to 4.5 times annual salary for a maximum mortgage. The average UK house price stood at approximately £285,000 in late 2024 (ONS House Price Index).
Assuming a 10% deposit (£28,500), you would need a mortgage of £256,500. At 4.5x salary, this requires a gross salary of approximately £57,000, or a combined household income of around £45,000–£50,000 for two applicants.
Regional variation is dramatic:
- North East: Average house price ~£160,000. Solo purchase possible on ~£35,000 salary with modest deposit.
- Yorkshire/West Midlands: Average house price ~£230,000. Approximately £50,000 salary needed solo, or £35,000–£40,000 each for couples.
- London: Average house price ~£530,000. Solo purchase requires approximately £115,000 salary, or strong joint income of £80,000+.
Use our mortgage affordability calculator to model your specific situation.
Good Salary for Retirement Planning
A salary that enables adequate retirement saving is another meaningful benchmark. The Pensions and Lifetime Savings Association (PLSA) Retirement Living Standards for 2024 suggest:
- Minimum retirement: ~£14,400/year (covers basic needs, no car)
- Moderate retirement: ~£31,300/year (some leisure, car, and holidays)
- Comfortable retirement: ~£43,100/year (regular holidays, hobbies, more financial freedom)
To achieve a moderate retirement income of £31,300/year by age 67, a financial planner would typically advise contributing 10–15% of gross salary from your late twenties onwards. On a £45,000 salary with employer matching, this is achievable and leaves a healthy take-home pay. On salaries below £30,000, retirement saving requires more discipline and supplementary tools like the Lifetime ISA.