UK Top Earners: How Much Income Do You Need? (Top 25%, Top 10%, Top 1%)

Matt | Personal Finance

UK Top Earners: How Much Income Do You Need? (Top 25%, Top 10%, Top 1%) #topearner #financialsuccess #topincome #topsalary   This video looks at the latest income and salary figures revealing how much the top 25%, 10% and 1% are earning across the UK.   The numbers tell us an interesting story about age, sector and location based earnings. We explore the information and also look at what it means to be wealthy and why being a top earner doesn’t always equate to being “rich”   The data on income is from the Office for National Statistics. The report is here:  https://www.ons.gov.uk/employmentandlabourmarket/peopleinwork/earningsandworkinghours/bulletins/earningsandemploymentfrompayasyouearnrealtimeinformationuk/september2024

Transcript

00:00Have you ever wondered what income you need to have to be considered a top earner in the UK?

00:04I've done the research and I'm going to share with you what it would take to be in the top 25%,

00:09top 10% and that all important top 1% of earners if you live and work in the UK.

00:15If you're new to this channel, I'm Matt. I've been a finance consultant for over 10 years.

00:19I've worked for one of the top consulting companies in London. I now run my own company

00:24and on this channel, I talk all things personal finance. So let's get going with the earnings

00:28breakdown. The figures I'm going to show in this video are based on the ONS September 2024 report,

00:34which you can access online. These are pre-tax figures and are based on both full-time and

00:39part-time earners. If you were to exclude the part-time earners, then the salary amount for

00:44full-time earners would be slightly higher. If you look at the overall UK median salary per month,

00:49it is £2,420 or £29,040 per year. This is up by about 6.2% compared to last year,

00:58with the recent high inflation continuing to push up wages. The median pay varies greatly by

01:04industry. And as you can see from this graph, finance and insurance lead the way with the

01:08highest median salaries. Then health work, education, construction, transportation, and

01:14manufacturing jobs are in the middle with accommodation, food, retail, and the arts and

01:20entertainment industries with the lowest median salaries. So what are the top 25% earning?

01:26On average, people in this category are earning £40,920 per year or £3,410 per month.

01:35There are around 5.6 million full-time earners in the UK in this category. You might be watching this

01:41video and thinking, actually, I'm earning close to that, or even I'm earning more than that. And that's

01:46great if that's the case, because that means you're already earning more than the majority of people

01:51in the UK. So next up is the top 10%. According to the ONS report, they're earning on average £66,060

01:59per year or £5,505 per month. There are around 2.25 million full-time earners in the UK in this group,

02:09and managers, directors, and senior officials are the highest earners in this category.

02:14And finally, what are the top 1% earn in the UK? They earn a massive £187,596 per year or £15,633

02:26per month. Although this is a big jump from the top 10%, you might be thinking, this is not quite as

02:33much as you were expecting. Remember, this is earned income and not wealth from things like assets. A lot

02:40of the rich people in the UK will be increasing their wealth from their assets appreciating, such

02:45as stocks and shares or real estate. And this is not factored into the earned income calculation.

02:51There are a couple of factors influencing earnings in the UK. The first is the strong correlation

02:57between earnings and age. So as age increases, so does earnings. The highest earners in the UK are

03:04typically in their 40s or early 50s. And the lowest earners in the UK are typically under 20 or in their

03:11early 20s. So don't worry if you feel like you're behind or you're not in the top categories of earnings

03:17just yet. The second factor is location, which also plays a big part. The higher salaries are typically

03:24paid in the large cities. And the cost of living difference contributes to different levels of earnings

03:30seen across the UK. For example, a central London average salary in Westminster is £3,559 per month versus

03:40an average salary in Manchester of £2,237 per month. If you want to see what the median salary is in the

03:48area that you live and work, you can use the interactive graph on the ONS website to see this.

03:54So does having a high earned income actually mean you're rich? Well, not necessarily. An individual

04:01could be in the top 10% or even in the top 1% of earners. But if they have a high cost of living

04:07and lifestyle to maintain, the amount of money they're able to save and invest could actually

04:12be quite small. For example, although you might live and work in central London and have an above

04:18average salary, the high cost of living means that your disposable income could be lower than someone

04:23doing a similar job earning less per month outside of London. The key to growing your wealth is using

04:29your earned income to invest and over time to compound those investments to become wealthier and

04:35wealthier. If you want to improve your earnings and move into a higher category and importantly be able

04:41to save and invest more money, then in my view, the number one thing is to focus on building your

04:47skills and improving your value on the job market. This will make you more attractive to employers

04:52and as such, your earning potential will increase. I hope this video has been helpful. Feel free to

04:58leave any questions in the comments and give the video a like and a subscribe and I'll see you on the

05:03next video.

Category

Transcript

Recommended