How much money do you need to live comfortably in the UK?
Originally published September 11, 2023. Updated June 30, 2026 to reflect major cost of living increases.
Do you know how much money you need to live comfortably in the UK? Most people don’t have a clue.
And that’s understandable because it can get really complicated really quickly. Are you single or do you have a partner? Do you have kids? And if so how many? Where do you live? North or South? In the city or in the sticks? And perhaps most importantly, what kind of lifestyle do you lead?
The fact that however much we have never seems like enough is also a problem.
In other words, it’s not easy. Not by a long shot. But this week we’ll have a crack at getting to the bottom of this topic once and for all.
Sure, this is written for expats thinking about returning to the UK, but hopefully anybody living in Britain should find it useful.
We give you three standards of living for four sizes of family and then do it all over again for London.
Just one little piece of housekeeping before we get into it. There are a lot of numbers in a lot of tables this week. Unless we say they are monthly, you can assume they are yearly and all of them are in thousands.
In other words, if it says 7 is means £7,000 and if it doesn’t specifically say per month it means per year.
Let’s get into it.
Here are the numbers but read on for an explanation of how we came up with them. They are annual numbers in their thousands so 73 = £73K per year for example.
| Standard | Single | Single + 1 child | Couple | Couple + 1 child |
| Comfortable | 73 | 95 | 96 | 115 |
| Moderate | 57 | 78 | 73 | 92 |
| Minimum | 32 | 54 | 43 | 62 |
How much do you need for retirement in the UK?
Let’s start by taking a look at retirement. And that’s because that’s where we find the best idea of how much money we need to fund different levels of life style.
You see some nice people over at the Pensions and Lifetime Savings Association (PLSA) have done the hard work so that we don’t have to.
They’ve come up with three sizes of retirement living standards to aim for in the UK.
These are:
- Minimum
- Moderate
- Comfortable
Minimum
Not only are basic requirements all covered with the ‘minimum lifestyle’, but you’ll also have a little remaining for having a good time and socializing.
It includes for a UK holiday, monthly eat outs and a couple of leisure pursuits a week.
(In case you are interested in the absolute basic levels, you may want to have a look at work by the Department for Work and Pensions who cover relative poverty thresholds).
Moderate
With a ‘moderate’ lifestyle you get more financial security and flexibility. You’ll have money to do more of the things you want including eating out multiple times a month, foreign holidays and more leisure activities.
Comfortable
Comfortable brings luxuries into the mix, multiple foreign holidays and the freedom to be more spontaneous with your money.
Annual retirement targets
| £ / thousands | Single | Couple |
| Comfortable | 45.4 | 62.7 |
| Moderate | 32.7 | 45.4 |
| Minimum | 13.9 | 22.5 |
Now, these numbers are a great start, but they aren’t perfect by any means.
In fact, for most people of working age they have some gaping holes.
And these are:
- Tax
- No children included
- Outside London
- Assume the unlikely scenario that you live in your own mortgage free house
In other words they don’t quite cut the mustard for us!
But no worries, because we’ve found ways to take account of all of the above.
How much UK tax will I pay in retirement?
How much tax you pay in retirement is another one of those questions that is almost impossible to answer accurately. But there is a method of coming up with a good enough starting point quickly.
You see, there’s a rule of thumb that says assume 30% before retirement age and 20% afterwards.
The difference is based on the fact that you need to pay national insurance before the official retirement age.
Though not a perfect solution for everybody it will provide a good enough gestimate for most of us.
How much does it cost to raise a child?
On average retirees tend to spend less in retirement than they did whilst working. And, it seems there’s a major reason for this……… Little bundles of joy!
It turns out children cost money. Dare I say it, a lot of money! But hey they are more than worth it (most of the time!)
The key question then becomes how much do those little rays of sunshine end up costing?
Luckily for us the Child Poverty Action Group has done some in-depth research into this very question and come up with an answer. In fact, they’ve come up with two. One for single parents and one for a couple.
- Couple – £260K
- Single – £290K
I don’t think it makes good reading for either, but it’s worse for a single parents simply because your childcare costs increase.
In any case, these numbers are based on some serious research so they are probably as good as we are going to get.
Just know, they don’t include for University or private schools (ie the ones you have to pay for!)
Now, that doesn’t mean you can’t send your kids to either of the above. It just means you either need to sacrifice somewhere else or be rich (which we’ve covered later too).
Anyway, we can divide these numbers by 18 to get an idea of how much we will be looking to spend each year on children.
Another point worth mentioning is that additional children are cheaper than the first but not by much. The data suggests about 80% of the cost of the first one due to bulk buying. We’ve only looked at the cost of adding one child to your expenditure to keep things simple, but if you have more simply add £13K per year if you are a single parent or £11.6K if you are one half of a couple.
In other words we get these numbers:
| £ / thousands | Single | Couple |
| First child | 16 | 14 |
| Additional children | 13 | 11.6 |
One last point, worth mentioning is the fact that as you go up the income levels you may expect that this would include spending more on your kids.
However, we found no research to support that.
So we’ve assumed kids cost the same whoever you are. In some cases this is likely to be correct, in others it may not be. (More of an adequate solution than perfection).
How much rent should I pay?
We are assuming people are renting or that you spend the same amount on rent as you would on the mortgage and expenses for your own house.
For sure, some people will want to buy a house and that’s fair enough, but the point is, you don’t have to. Renting is nearly always cheaper than buying.
Some people see their house as an investment but as we’ve talked about before, renting the property you live in and using excess cash to invest in either index funds or buy to let is often a better way to grow your wealth.
And now the renters reform bill has come into play the days of landlords being able to kick you out of your home without an extremely good reason have more or less come to an end anyway. And this gets rid of another major reason for buying your own property.
So the question then becomes how much money do I need to put towards rent?
Research from Nimblefins shows ‘people with no dependent children who rent privately pay an average of £1,185 per month for rent, while those with at least one dependent child pay an average of £1,243 per month.’
The numbers
Based on that, here are the numbers:
| Standard | Single | Single + 1 child | Couple | Couple + 1 child |
| Comfortable | 73 | 95 | 96 | 115 |
| Moderate | 57 | 78 | 73 | 92 |
| Minimum | 32 | 54 | 43 | 62 |
To some people those levels might not seem high, but my guess is, they will appear very high for most. Particularly anybody who read our original piece. Considering the fact that it’s only three years since we last did this, its pretty amazing how much the cost of living has increased in the UK in such a short time. Here’s a quick recap:
| Standard | Single | Single + 1 child | Couple | Couple + 1 child |
| Comfortable | 67 | 78 | 98 | 107 |
| Moderate | 41 | 52 | 60 | 69 |
| Minimum | 23 | 34 | 35 | 44 |
And based on that here’s the difference:
| Standard | Single | Single + child | Couple | Couple + Child |
| Comfortable | 6 | 17 | -2 | 8 |
| Moderate | 16 | 26 | 13 | 23 |
| Minimum | 9 | 20 | 8 | 18 |
Ouch! A couple aiming for a comfortable standard pay just a tad less. Everybody else pays a lot more. And to be honest the fact the couple without children pay less is more to do with the way we accounted for rent this time around. We couldn’t do it in the same way as last time because current data simply wasn’t available to do it that way.
In any case, people with kids aiming for a moderate lifestyle have been hit the hardest, now having to pay £23-26K more.
Whilst those numbers cover most of the UK, they don’t include London. But don’t worry we’ve haven’t left it out.
What do I need for a life in London?
Now on the face of it, London is yet another tricky one because the closer you get to the centre the more expensive things become. I’m guessing it’s an almost logarithmic rise.
However, we can take a more general approach. That’s because according to Trust for London, based on their research it’s easy. You need 20% more in London on average. (Not perfect, but helpful enough for us).
So based on that here’s some numbers for London.
| Standard | Single | Single + 1 child | Couple | Couple + 1 child |
| Comfortable | 88 | 114 | 115 | 138 |
| Moderate | 68 | 94 | 88 | 111 |
| Minimum | 38 | 65 | 52 | 75 |
Final thoughts
With one child and ambitions for a moderate lifestyle at the very minimum, I fit into one of those groups that have been hit hardest.
An increase from £69K to £92K is equivalent to 33% increase in three years which quite frankly is insane.
