According to Forbes, the average salary in the UK is £37,500py (per year).

It’s a decent amount, but with rising living costs, student loan repayments and other monthly outgoings, it’s easy to feel like money disappears the moment you get paid. 

That’s why I like to follow the 50/30/20 rule - splitting my take-home pay into needs, wants and savings. It keeps things simple and helps me stay in control. 

First things first – what would your ‘take home pay’ be? 

Let’s start with what a £37,500 salary looks like after tax and a student loan repayment (Plan 2). 

Here’s a rough breakdown using standard UK tax bands (2025 rates): 

• Income tax: around £3,486py
• National Insurance: around £2,726py 
• Student loan (Plan 2): about £393py 

Take-home pay: around £30,895 per year, or about £2,575 per month. Now that we know the monthly amount, here’s how I would split it. 

50% for needs – £1,287 per month 

This covers the basics I can’t avoid, like housing, bills, food and travel. My typical split might look like this: 

• Rent: £750 (maybe less if sharing) 
• Utilities and council tax: £200 
• Groceries: £200 
• Travel: £70 
• Mobile and broadband: £40 

Needs are the most important category. I’d try to keep rent reasonable and avoid overspending on energy or food where I can. 

30% for wants – £772 per month 

This category consists of items after thinking - “What are things I enjoy but could live without” For me, that might include: 

• Going out with friends 
• Clothes and shopping 
• Subscriptions – Netflix, Spotify, Paramount etc 
• Eating out 
• Weekend trips or holidays 

This is the category I’d watch most closely. It’s easy to lose track of little purchases here, so I’d set limits and use a budgeting app to stay on top. 

20% for savings – £515 per month 

This is where I “pay myself first.” I’d set this money aside straight after payday so I’m not tempted to spend it. 

Here’s how I might split it: 

• £250 into a savings account (for future plans or big purchases) 
• £150 into investments (for long-term growth) 
• £115 into an emergency fund (aiming for 3 - 6 months of expenses) 

Savings give me freedom. Whether it’s for a house deposit, unexpected car trouble, or just peace of mind. This part of my budget is a priority. 

A few things I try to keep in mind 

• I review my budget monthly to tweak anything that’s not working 
• I automate my savings so I don’t forget or skip them 
• I live below my means where I can, just in case something unexpected comes up 
• I use cash or debit to avoid racking up credit card debt on wants 

Final thoughts 

Budgeting a £37,500 salary in the UK is totally doable with a bit of planning. Using the 50/30/20 rule gives me structure, but I still adjust things based on what’s going on in life. 

The key for me is making sure

• Cover the essentials 
• Enjoy my money (within reason) 
• Set something aside for the future 

If you’re earning around this amount and want to get better with money, start with a basic plan, track your spending and build from there. 

It’s not about being perfect - it’s about being intentional. 

References - Average UK Salary by Age in 2025: Full Breakdown & Key Insights – Forbes Advisor UK