How Far Will Your UK Entry-Level Salary Go?

The UK has one of the highest minimum wages among the developed nations, based on the data by the World Economic Forum (WEF). In 2018, it almost reached 8 euros per hour in terms of purchasing power. As a comparison, that’s higher than the per-hour wage in Canada, Japan, and the United States.

But the cost of living in the country is also high. It then begs the question, how far can an entry-level salary go here?

How Much New Graduates Can Earn

The average entry-level salary for graduates can vary depending on a lot of factors, such as education or industry. According to PayScale, new accounting assistants with minimal to zero experience may take home almost £20,000 a year.

Meanwhile, Technojobs revealed that a new graduate software programmer can earn as low as £20,000 to as much as £40,000 annually. The average salary is £28,000.

Overall, the average entry-level wages in the country is £25,000, said CW Jobs, or £29,000, according to the Institute of Student Employers (ISE).

Based on this information, new hires are more likely to get significantly less than the general workforce since the average annual salary in the UK now is almost £40,000 for a full-time role.

Where the Brits Spend Their Money On

When it comes to spending, a UK household spent around £2,500 a month or over £30,000 a year in 2019. Note, though, that this number represented homes with at least two people.

Even if the entry-level salary is below the average annual expenditures, these employees may also likely split the bill with other household members.

Now, where does this money go to? The government data revealed that it actually depends on factors like age. Households with members below 30 years old are the ones who may spend more on food and housing than any other age group.

Housing in the UK is expensive, but prices can differ on where a person lives. A flat in London, for example, may cost about £750 per month. Based on the average salary of an entry-level employee, a lease in the capital could account for over 35% of their budget.

However, if they decide to move outside the city, perhaps move to Leeds, and work with estate agents, they can lower housing expenses. On average, a flat in these places may cost a little over £600.

person holding money

Budget on Food

How about food? The Office of National Statistics shared that a good number of UK households spend a mind-boggling £3,224 on groceries alone each year. Within the same period, about a half more goes towards takeaways and dining at restaurants. Food makes up over 15% of their expenses.

But the actual spending can differ by age. The data from Statista revealed that in 2017–2018, those below 30 years old spent the least money on food weekly at 43.4 in GBP. This could be because this is the age group for most entry-level employees.

The spending increased significantly among the 30–64. The households may likely compose of bigger families (such as parents with children), or homeowners have a much higher income to spend on pricier, better, and more food.

It then declined as the ages went up. Households with seniors 75 years old and above spent almost the same amount as those in the less-than-30 age group. It could be that they’re living alone, they’re in a nursing facility where food is already included in their fees, or they’re depending on retirement income or pension.

Nimble Fins also illustrated how gender and fitness can affect total spending on food. An average adult man may shell out around £30 on groceries, of which £19 goes towards food. However, those who are active may end up spending £60 a week on food since their caloric needs could be 50% higher.

The total bill of an adult woman in the UK may be £36 a week, but almost £12 of that is takeaways and restaurants.

How about Other Expenses?

Travel costs in the UK are more expensive than in other countries since private companies now operate them. But commuting on trains and buses is usually more affordable than owning a vehicle.

Prices can vary, including in London where coverage is divided into zones. A weekly travel card for 1–6 zones will cost around £60.

In Leeds, residents can choose among different types of passes. The weekly ticket for a countrywide bus costs £24.50. For those who also want to use the rails, the weekly spending may range from £31 to £45, according to zones.

Can someone in the UK live with an entry-level salary? The answer is yes, but it also demands compromises and sacrifices. The cost of living remains high, so it benefits them to strive to get a pay raise each year or look for a better-paying job within 2 to 3 years.