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You would have to be living under a rock not to have noticed that everyday costs have been spiralling in recent years.
Households across the UK are feeling the pinch as rising interest rates, sky-high inflation and economic uncertainty have taken their toll on the country’s finances.
Prices have increased by an eye-watering 27.3 per cent in the past five years (between May 2021 and March 2026), according to a report from the House of Commons Library.
But for all the talk of a soaring cost of living, it can be hard to keep track of how much you actually need to earn to get by these days.
And how much higher does your salary really need to be if you live in the capital, compared with other British cities such as Birmingham, Edinburgh or Manchester for example?
Analysts at investment platform AJ Bell have crunched the numbers, using Government data to see how much the average two-adult household with a mortgage is spending each month on essentials from food, clothes and transport to insurance, council tax and energy bills.
The costs have been broken down by region to find out how much you really need to earn to keep the family finances in the black – and the results may surprise you.
The average monthly spend for a UK household is a massive £2,964. This does not include luxuries or nice-to-haves such as holidays, but does include average spending on meals out, trips to the cinema or theatre, and personal care such as hairdressing.
The average monthly spend for a UK household is a massive £2,964. This does not include luxuries or nice-to-haves such as holidays
The overall spend is equivalent to £35,567 a year and a couple would need a combined income of around £39,624 before tax to pay for this, assuming they have no other costs and not allowing for any savings or pension contributions.
But this will only cover the basics, you will need more than this to live a comfortable lifestyle or set any savings aside. For example, anyone planning a holiday, those who need a new car, who want to do home improvements or even families who have young children in childcare will need to earn substantially more to cover pay for these costs.
The average salary in the UK was £32,890 in 2025, according to official data from the Office for National Statistics’ latest Annual Survey for Hours and Earnings. This means that a family with a single earner on the average salary would not be paid enough to cover the very basics for their family.
Households spend £300 a month on food and non-alcoholic drinks on average, £48 a month on alcohol and tobacco, and £75 a month on clothing and footwear.
Mortgage costs are the largest single outgoing, at an average of £1,592 a month. Utilities eat up much of the budget too: water is £50 a month, electricity £88, gas £68 and council tax £183.
Sarah Coles, head of personal finance at AJ Bell, says: ‘Costs have gone up for everyone, and inflation over the past few years has been horribly painful all round, but when you delve into the data you can see just how hard some regions are being squeezed.’
London is infamous for its high-cost living, where it’s common to pay £7 for a pint, housing costs are typically the highest in the country and residents have to spend more on transport. But how much do you need to earn to survive in the capital?
Those living in London spend considerably more than elsewhere, with average monthly outgoings of £4,414. While this may come as little surprise, what may be less expected is that Londoners have the lowest costs in four out of 16 categories of spending we analysed – alcohol and tobacco, electricity, petrol, TV – and had the highest outgoings in just four categories.
A lower outlay on fuel is likely because more people in the capital use public transport over their own vehicle, according to Coles.
Housing costs are the clincher in the capital, where the typical mortgage eats up £2,940 of the monthly budget. This is more than three times the £809 monthly spend on mortgages in Scotland.
Council tax is considerably higher in London too, at an average of £292 a month.
A London couple will spend on average £52,972 a year on essential outgoings. To be able to cover these minimum costs, they will need a combined income of at least £63,792 a year, according to the calculations.
Wages do tend to be higher in the capital, thanks to what’s known as the ‘London weighting’. The average salary in London was £39,778 in 2025, according to official data – £6,888 a year more than the average across the UK. However, this falls short of the extra £17,405 you need to get by in London compared with elsewhere.
Coles says: ‘It’s not that Londoners are living the high life – they’re spending less than average on everything from foods and drink to communications and TV packages.
The average house price in London is £542,000. And those living in London spend considerably more than elsewhere, with average monthly outgoings of £4,414
Anyone living in the East of England needs at least £39,024 a year to spend on the basics, with the average household of two needing a combined income of £44,424 before tax
‘The trouble is that they’re forking out a small fortune for property – and these figures lay bare the consequences of sky-high property prices in London.’
The average house price in London is £542,000, according to official figures, compared with a national average of £268,000.
It’s worth noting, too, that we have not included childcare costs in our calculations.
For a London couple with one child under the age of two, this would add £997 a month (£11,961 a year) to their outgoings, assuming they need 25 hours of childcare per week and receive no working parent entitlement. The average cost of childcare is £764 a month in England, or £9,166 a year, according to Coram, the children’s charity.
Households in the East of England have the highest outgoings in seven of the 17 categories we analysed – the most by far – and yet their overall monthly costs, at an average of £3,252, are only the third highest. Spending on insurance is considerably above the average, at £27 a week, and they also spend the most on food and drink, at £74. Low-lying geography and number of flood plains in the region could explain why these households are having to spend more on insurance.
Anyone living in this region, which includes Norwich and Ipswich need at least £39,024 a year to spend on the basics, with the average household of two needing a combined income of £44,424 before tax. The average salary in the East of England was £34,104 in 2025, according to official data.
Households in the South East live in the second most expensive region in the UK – and need to earn the salary to match. Here, households of two spend £41,460 a year on the basics and need a combined income of £47,808 before tax to pay for them. Perhaps surprisingly, those in the South East tend to spend more on utilities than households in London – spending £93 a month on electricity and £74 a month on gas, compared to £81 and £68, respectively, in London.
Those in the North East of the country have the lowest outgoings in six spending categories including health, insurance and water. But the amount spent on recreation is also lower than the average, suggesting that these households are still feeling the pinch.
They spend on average £122 a month on eating out, and just £6 on cinema and theatre. Mortgage costs here are considerably below the average at £853. The total average monthly spend for the region is £2,144 – some £820 below the national average.
The average monthly spend in the East and West Midlands is incredibly close, separated only by a few pounds at £2,526 and £2,555 respectively. Here, households need to earn around £32,500 before tax to get by. The average salary in the East Midlands was £30,690 a year and £31,345 a year in the West Midlands.
In the North West, average monthly costs are £2,449, and Yorkshire and the Humber is marginally cheaper at £2,389.
Households in Wales spend the least on public transport, at a monthly average of just £3.90, but the most on alcohol and tobacco, at £59. Overall, average monthly costs for the region are £2,411. This requires a pre-tax income of £30,408.
But it is Scotland where the overall cost of living is lowest. The average monthly spend is £1,971 – equivalent to £23,652 a year. Mortgage costs are lowest, at an average of £808.99 a month, and the region also has the lowest average spend for clothing and footwear (£59), meals and drinks out (£101) and council tax (£124).
Households in Scotland need a combined income of just £23,652 before tax.
So, is it worth moving elsewhere in the country to cut your costs?
A relocation to the other side of the country might save a few hundred pounds a month, but there is more to consider: jobs, friends and family, and quality of life.
Coles says: ‘It’s less typical to consider a move much further afield to cut costs, but plenty of people will consider a longer commute. There are also plenty of people who will consider a move to a city elsewhere in the UK, offering career opportunities without breaking the bank.’
If that feels too extreme, then the best way to cut your costs is to shop around for everything you possibly can – from your food shop to your phone bill and household insurances.
Coles adds: ‘It’s only when you’ve done all these things and still face enormous costs that you might need to consider bigger cuts and making some more difficult sacrifices.’
Vix Leyton, consumer expert at Think Money, says: ‘The biggest savings are not always in dramatic lifestyle changes – they are often in renewals, repeat payments and bad habits that are easy to fall into when you’re time-poor and the smallest bit of admin feels a bit overwhelming, but a few minutes on key areas can have a big impact.’
When it comes to energy bills, make sure you are submitting regular meter readings and check that your direct debit still reflects your actual usage.
Leyton adds: ‘For subscriptions, comb your bank statement and ask whether you would actively choose to sign up now – whether that’s streaming services, cloud storage, fitness apps or delivery passes. They can all be paused, rotated or cancelled if you’re not using them.’
Anyone whose mortgage deal is coming to an end should speak to their lender or broker early – don’t move on to the standard variable rate. This is the biggest expense for most households so shopping around can make a real difference.
Leyton adds: ‘The aim is not to cut every comfort out of the household budget. It is to be more deliberate about what earns its place.’