Is £40,000 a Good Salary in the UK? An In-Depth Look
A £40,000 salary is a significant milestone for many professionals in the United Kingdom. But is it actually a "good" salary? The answer depends heavily on your lifestyle, location, and financial goals. Let's break it down.
First, Your Take-Home Pay
Before you can assess if £40k is good, you need to know how much you'll actually see in your bank account after taxes. The headline figure isn't what you have to spend. Here is the detailed breakdown for the 2025/2026 tax year.
Take-Home Pay (Annually)
£2,693.30 per month
Gross Salary
£40,000.00
£3,333.33 / month
Total Deductions
£7,680.40
£640.03 / month
Your Personal Allowance
£12,570.00
Tax-free income
Effective Tax Rate
19.20%
Total deductions as % of gross salary.
Deductions Breakdown
With a take-home pay of approximately £32,166 per year, or £2,680 per month, you have a solid foundation for budgeting and saving. Want to see how your own salary breaks down? Try our free UK salary calculator.
How Does £40k Compare to the National Average?
According to the latest ONS data, the median full-time salary in the UK is around £34,963 (as of April 2023). This means a £40,000 salary is comfortably above the national median, placing you in a better-than-average earning position.
However, this is a national picture. "Good" is relative to location.
- In London: A £40k salary can be tight. With high rent and living costs, you would be considered a lower-to-mid earner. You'll likely need to house-share and budget carefully.
- In Major Cities (Manchester, Birmingham, Bristol): Your £40k will go much further. You can afford a comfortable lifestyle, including renting a one-bedroom flat on your own, dining out, and saving.
- In Smaller Towns and Rural Areas: This salary is very strong. You could potentially save for a mortgage, enjoy a high quality of life, and have significant disposable income.
Lifestyle Considerations
On £40,000 a year, you can generally afford:
- A decent standard of living outside of London.
- Regular contributions to a pension and savings account.
- An annual holiday abroad.
- To run a modest car.
- A social life with regular meals out and entertainment.
Where you might feel a pinch is on larger financial goals, such as saving for a house deposit in the South East, or if you have significant debt or dependents.
The Verdict
Yes, a £40,000 salary is a good salary in the UK. It puts you above the median earner and provides for a comfortable lifestyle in most of the country. While it may not feel like a fortune in the most expensive cities, it is a solid financial base from which to build a secure future.