Is £40,000 a Good Salary in the UK in 2025?
Whether £40,000 is a "good" salary depends on where you live, your household situation, and what you compare it to. In raw after-tax terms, a £40,000 salary in England in 2025-26 gives you a take-home pay of approximately £31,067 per year — or roughly £2,589 per month. Here is how that compares to UK benchmarks and what it means in practice.
What is £40,000 after tax in 2025-26?
For a standard employee in England with a 1257L tax code and no other deductions:
- Gross annual salary: £40,000
- Income Tax: £5,486
- National Insurance (8%): £3,448
- Total deductions: £8,933
- Net annual take-home: £31,067
- Net monthly take-home: £2,589
- Net weekly take-home: £598
Note: Scottish taxpayers pay slightly more income tax at this level due to the 21% intermediate rate applying between £26,561 and £43,662, giving a take-home of approximately £30,744.
How does £40,000 compare to the UK average?
According to ONS data, the UK median annual earnings for full-time employees was approximately £34,963 in 2024. A £40,000 salary sits comfortably above the median — you are earning more than roughly 60–65% of full-time workers in the UK. It is not in the top quartile, but it is a solid middle-income salary.
The mean (average) full-time salary in the UK is pulled higher by very high earners and sits around £38,000–£42,000 depending on the year and methodology — so £40,000 is right around the mean.
Regional context
Purchasing power varies enormously across the UK:
- London: £40,000 is below the London median (approximately £45,000–£48,000). After paying average London rent (£2,000+/month for a one-bedroom flat), £2,589 monthly take-home is very tight. Many consider £40k a low salary for London.
- Manchester, Leeds, Birmingham: £40,000 is comfortably above local medians (typically £28,000–£33,000). Rent for a one-bedroom flat averages £900–£1,300/month, leaving significant disposable income.
- Northern England, Wales, Northern Ireland: £40,000 places you well into the top quartile locally. Living costs are significantly lower than London, making this an excellent salary.
£40,000 and the tax system
At £40,000 you are a basic rate taxpayer — you pay 20% Income Tax on earnings between £12,570 and £40,000. You are well below the higher rate threshold of £50,270, so no 40% tax applies. Your effective (average) income tax rate is approximately 13.7%. You do not lose your Personal Allowance (that only starts tapering at £100,000).
If you have a student loan (Plan 2), an additional 9% repayment applies on earnings above £27,295, deducting approximately £1,144 per year and reducing take-home to around £29,923.
Can you live comfortably on £40,000?
Outside London, yes — comfortably so for a single person, and adequately for a couple in most areas. In London, £40,000 is workable but requires careful budgeting. With a mortgage rather than renting, and outside the south-east, £40,000 supports a genuinely comfortable middle-class lifestyle. The Joseph Rowntree Foundation's minimum income standard for a single working-age adult outside London (covering a decent but modest standard of living) is approximately £29,000–£31,000 — so £40k provides meaningful headroom.
Frequently asked questions
Is £40,000 enough to get a mortgage?
Most lenders will offer 4–4.5 times annual salary, meaning a £40,000 earner could typically borrow £160,000–£180,000. With a 10% deposit, that covers properties up to approximately £178,000–£200,000 — achievable in many parts of England, Wales, Northern Ireland, and Scotland, though challenging in London and the south-east. A second income in the household significantly increases borrowing capacity.