Can I live off £40,000 a year?

Hello,

My name is August, and I'm new here. Currently in Oregon, my family and I are moving over to London soon. We have our second child on the way (any day now), and very excited to experience a new culture with our family. There is a lot of information to explore here, but I thought I'd start off with a question. Can I live off £40k a year? I understand this is a tricky question for anyone to answer, but I would love your personal opinion. I am having trouble breaking hard numbers down to gauge what it would require us to live in London. I have a job that is paying for our visas and some of our move, so that is great. But with £40k, where can we actually live in the London area. Any advice, thoughts, humor is welcomed.

Anyways, thanks to those who built this community. I wish I found it sooner. Thank you for your time.

August

With £40k as a single income, I reckon I’d struggle with two kids down South. But plenty do it!!

You’d probably have to live reasonably frugally - eating out/ taking out once or twice a month... maybe one holiday a year? Your biggest costs will be housing and transport.

Take home pay is likely to be about £2300/£2400 a month , maybe a little more if you opt out of a pension. Might help you start to think about budgeting.

That said, this is an above average salary... and many make due on far less.


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Of course everything depends on lifestyle.

Use salarycalculator.co.uk to see what your take home pay will be based on pension deductions, etc.

Then look at Rightmove.co.uk for an idea of rentals in the area you want. Then look at the council tax for that place (bands set by the local council. For example mine is £265 a month but I’m not in London).

Then consider commute costs. You may get more house further afield but commuting is expensive.

Then see what’s left for food, utilities, phones, and holidays.   If you need childcare, you’ll need to budget that in.

£40k is a decent salary in the UK, but not in London.  And definitely not for an international transfer.

You may want to spend some time on rightmove.co.uk to check your housing requirements and costs.

My husband lived comfortably in a one room bachelor apartment in a not very nice area of London on 40k and had an hour+ commute daily, but it was all on the tube so not horribly expensive. Now we live outside London and have a small 3bed house but if he needs to go in for work it's a £35 journey, if he needed to do that daily it would add up fast. His salary is covering both of us now, be aware there are some significant differences in employment so if your spouse also has a career they may run into issues continuing it here.

I'd say it will probably be difficult to get by on 40k for a family of 4 in London and require significant budgeting, and likely living in cramped housing without a garden if the company isn't giving an additional stipend for housing.

I appreciate the feedback so far! Thank you.

My salary does concern me, and even though the feedback wasn’t all what I had hoped to learn, it does help me plan better.

My wife is a cosmetologist. I don’t think she plans to take her practice to London, but she has thought about getting a part time gig. Anyone have advice on finding part time jobs, please do share.

Any advice on what areas would be good to at for housing? We are thinking if we could get a smaller, cheaper place to live under £1k for a year then we could save, and hopefully have a larger salary to rent something bigger.

I also hope to bike if I can.

Thanks all!

10 years ago a friend paid £1100 a month for a studio apartment in Zone 2.

Under £1,000 a month will be very tough. And remember council tax and utilities aren’t included.

10 years ago a friend paid £1100 a month for a studio apartment in Zone 2.

Under £1,000 a month will be very tough. And remember council tax and utilities aren’t included.

Even in Zone 6? I work in Farringdon. Would a zone 6 commute be too far?

Have a look on Rightmove.co.uk. I’m really not familiar with London living.

Use Google maps to help with commute times. Add a decent amount of time for not knowing the exact address you’ll be living.

Why is your company paying such a ridiculously low salary?  That's a major red flag for this whole thing.  That's not just kind of low, but insultingly low and bordering on not even meeting the living wage.  It's also an indicator that either they don't care about you at all, or haven't planned this position at all and will be equally incompetent about every other aspect.  This must be addressed before anything else.   I would go to one of the many job finding websites (jobserve if it's tech) and get a feel for what similar jobs to yours will be paying IN LONDON.  Undoubtedly it will be significantly more and you can use that as evidence for your demand to double that salary.  Think about that, even with the salary doubled you will be in the range of typical London salaries, probably on the low end if you have enough skills for them to move you to London. 

I guess you could do it, but why bother?  You will either have to live in a place outside of London that's smaller and crappier by far for what you could get in the US and commute for 1.5 hours each way, or live in the cheapest, most crime ridden terrifying part of London.  You won't have any money to travel, take holidays, eat out or even go to the pub.  Or even buy clothes for your kids.   You won't be able to afford a car, so if you live in the country you won't be able to go anywhere.  Sure you can use public transport in a city and make do without a car, but it's a different matter in the country. 

The only way any of this makes sense is if you can work from home almost all the time.  As that's becoming the new normal, maybe that's what they are thinking.  In that case, everything is completely different  as you can live lots of places that are much, much, cheaper than London and only come to the office once or twice a month.  That's all you will be able to afford anyway as Margo's £35 trip to London is no exaggeration.   In this case, I'd think about somewhere like Margate, or maybe Lewes where you could actually find something for £1000 per month. 

One more thing, childcare will take up ALL of your wife's income if she chooses to work.  I hope she's ready to be a stay at home mother with no money , which will be pretty bleak when it rains all winter and gets dark at 4:30.  And even bleaker when you get home at 7:30, exhausted from a hell commute, ready to wake up at 5:30 to do it again.

Sorry I couldn't find any humour for you!

That said, this is an above average salary... and many make due on far less.
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  Just want to be clear to the OP that this only true outside of London.  40k is well below average for London. 

Here's the results of a quick Google:
"According to recruiting data from Guardian Jobs U.K., the average salary in London is approximately $52,000. Of this, more than one-third goes to cover average housing costs, and more than half is needed for housing, groceries, and transportation."

Jimbo lives in London so do weight his views heavily.  And I agree on the transferring part. I honestly wonder if you could be granted a visa on that salary?  There are bands.

Another thing to know is that you need to make 30 times your monthly rent to be allowed to rent a place.  So that means your budget maxes out at £1,333 a month. And that’s no going to get you very much house.

Jimbo lives in London so do weight his views heavily.  And I agree on the transferring part. I honestly wonder if you could be granted a visa on that salary?  There are bands.

Another thing to know is that you need to make 30 times your monthly rent to be allowed to rent a place.  So that means your budget maxes out at £1,333 a month. And that’s no going to get you very much house.

Yeah, that was a good post by Jimbo. I’m a little down because of it, but it was really good to learn their perspective.

What do you mean by being granted a visa off that salary?

What do you mean by being granted a visa off that salary?

In order for a company to grant you a Tier 2 visa, you have to meet certain minimum salary requirements. Depending on what type of job it is and what position you will hold, you must be earning at least the specified minimum salary for that type of position in order to get the visa.

For example, if you are getting a Tier 2 Intra-Company Transfer (ICT) visa where you will be working for a UK branch of your US company as a Long-Term Staff member, the company must show you will be earning at least a minimum salary of £41,500, or the specified minimum salary for that job, whichever is higher, in order to qualify for the visa. (https://www.gov.uk/tier-2-intracompany-transfer-worker-visa/eligibility)

If you will be getting a Tier 2 General visa where you are being hired as a new employee at a UK company (not transferring with your US employer), then your salary must either be at least £30,000, or the specified minimum salary for that particular job, whichever is higher. (https://www.gov.uk/tier-2-general/eligibility) So, depending on the specific job, the minimum salary you would need to be earning in order to qualify for the visa could be anywhere from £30,000 to £84,507.

I'll be honest, most of the people who have asked on the forum before about living off a particular salary in London were usually being offered a salary in the region of £60,000 - £80,000, sometimes even higher... and most of them were also being given sizeable housing allowances and extra relocation benefits on top of that salary.

Unless you are a British citizen, you’ll need to qualify for a visa to move to the UK. Your company will handle it, as they hold the sponsorship license and will have a particular number of certificates of sponsorship they can issue.

Depending on role and location, there are minimum salary requirements to receive the certificate of sponsorship.

Why is your company paying such a ridiculously low salary?  That's a major red flag for this whole thing.  That's not just kind of low, but insultingly low and bordering on not even meeting the living wage.  It's also an indicator that either they don't care about you at all, or haven't planned this position at all and will be equally incompetent about every other aspect.  This must be addressed before anything else.   I would go to one of the many job finding websites (jobserve if it's tech) and get a feel for what similar jobs to yours will be paying IN LONDON.  Undoubtedly it will be significantly more and you can use that as evidence for your demand to double that salary.  Think about that, even with the salary doubled you will be in the range of typical London salaries, probably on the low end if you have enough skills for them to move you to London. 

I guess you could do it, but why bother?  You will either have to live in a place outside of London that's smaller and crappier by far for what you could get in the US and commute for 1.5 hours each way, or live in the cheapest, most crime ridden terrifying part of London.  You won't have any money to travel, take holidays, eat out or even go to the pub.  Or even buy clothes for your kids.   You won't be able to afford a car, so if you live in the country you won't be able to go anywhere.  Sure you can use public transport in a city and make do without a car, but it's a different matter in the country. 

The only way any of this makes sense is if you can work from home almost all the time.  As that's becoming the new normal, maybe that's what they are thinking.  In that case, everything is completely different  as you can live lots of places that are much, much, cheaper than London and only come to the office once or twice a month.  That's all you will be able to afford anyway as Margo's £35 trip to London is no exaggeration.   In this case, I'd think about somewhere like Margate, or maybe Lewes where you could actually find something for £1000 per month. 

One more thing, childcare will take up ALL of your wife's income if she chooses to work.  I hope she's ready to be a stay at home mother with no money , which will be pretty bleak when it rains all winter and gets dark at 4:30.  And even bleaker when you get home at 7:30, exhausted from a hell commute, ready to wake up at 5:30 to do it again.

Sorry I couldn't find any humour for you!

Hi, thank you for this.

My salary is in the middle of the companies average salary, and about £5k short of the overall average. I am a project manager.