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Top 5% Income UK

Top 5% Income UK feature image

Updated on:

Written by: Michael Barton

Updated on:

Written by: Michael Barton

Michael has almost quarter of a century’s experience in the financial world. This includes trading and institutional sales trading, and in senior positions to VP of Global Equities, as well as Head of Trader Training, at companies including Merrill Lynch (SNC), Cargill Investor Services, and Goldman Sachs. Michael’s experience also extends to providing financial advice as a personal financial advisor in the UK.
This article has been fact checked by a member of the Wallet Savvy editorial team and complies with our editorial standards.

How much do you think you’d need to be earning to be in the top 5% income in the UK? You might be surprised with the answer. And if you want to be earning more, you may also be surprised just how close you are…

Is the cost-of-living crisis starting to bite into your disposable income? It’s not something the UK’s top earners need to worry about, is it?

If you were one of the top 5% of earners in the UK, how different could things be for you?

In this article, we take a look at how much you’d need to earn to be in that top 5% – and offer suggestions that could help you improve your income and feel wealthier.

TLDR: Top 5% Income In The UK

The top 5% of income earners in the UK probably earn less than you think, and you’re probably higher in the earnings list than you think. That’s because poor financial habits play tricks with your perception.

Incredibly, the top 5% income in the UK is ‘only’ £7,251 per month or higher.

UK Average Earnings & Beyond

Let’s get straight to the nitty gritty: what income would get you into the top 5% of earners in the UK?

According to official figures from the Department of Work and Pensions (DWP), the median income in 2022 was £565 per week. That’s equivalent to £29,380 per year.

graph showing Income distribution before housing costs for the total population during the financial year ending in March 2022

If your household income is above this, then you’re already in the top half of household income earners. However, this masks a few complicating factors.

For example, if you are single then an income of around just £20,000 would push you into the top half of singleton earners. If you earn above £59,700, then you’re in the top 3% of single person household earners.

At the other end of the scale, as a couple with two children under 14, you’d need a household income of more than £41,300 to be considered in the top half of earners, and around £125,000 to be in the top 3%.

According to figures compiled by Statista, across the entire nation, in July 2023 the bottom 10% of earners earned only £759 per month. That’s some way below the median of £2,279.

And the top 5% – how much do they earn? Incredibly, it’s ‘only’ £7,251 per month.

Where Do You Stand In The Earnings League?

You may be higher up the league than you think. To be in the top 5% of earners, you’d need to earn around £87,000 per year.

But if you earn more than £3,500 per month – a salary of £42,000 – you’re already in the top 25% of income earners. And the DWP reports that almost 9 million of us earn £1,000 or more per week.

PercentileMonthly Earnings (£)

How much do you earn in comparison to others? The chances are that you’re higher in that league table than you thought. Which then begs the questions:

  • Why do you think you earn so little?
  • How can you push into the UK’s top earners list?

It’s Not Your Earnings, It’s Your Spending

There’s a disturbing truth that afflicts most of the nation. This is that we live to our means, and not within our means.

When we budget, we look at what we’ve earned, and figure out how to spend that money. It’s how we were taught to budget.

I’m going to be blunt here – if you budget this way, you’ve been doing it all wrong!

couple budgeting

If you budget to spend, you won’t save. When you don’t save, you’re not building wealth for the future.

Nor are you allowing yourself a cushion for small emergencies. This is when they become a financial burden.

Then the financial burden builds. You borrow money to dig yourself out of a hole, and that small emergency suddenly develops into a financial crisis.

You’re on the merry-go-round of borrowing, paying interest, and having less in your pocket.

The end effect is that your income becomes not enough to cover your costs. So, you feel like you’re not being paid enough.

The truth is that (certainly for most people) you are paid enough, but you’re spending too much.

The fact is that if we were wiser with our money, we’d feel wealthier when we get paid at the end of the month. It took me a long time to learn this. Mostly because I’d been conditioned to budget for spending first, saving second.

For years, I survived pay day to pay day. Some months I had to phone my bank manager to give me an extension on my overdraft for a few days before my pay was credited to my account. An overdraft that cost me in charges and interest.

I had personal loans, credit card balances, hire purchases… as well as a mortgage, and children, and utility bills…

For years I thought that I was underpaid, even though I had a well-paid job. Eventually, I decided to do something about my poor financial habits.

How To Feel Like You’re A Higher Earner

There’s a direct link between how you feel financially and your disposable income. The more you have left in your bank account at the end of the month, the happier you’ll be with your financial situation.

In short, every penny reduced from your outgoings feels like a penny extra you’re earning.

For me, this meant a long, hard look at what was important to me. I examined my lifestyle, my debts, and my income:

  • Instead of going for a beer every night after work, I cut back to one or two evenings a week.
  • I also sought ways to reduce my regular bills – buying own-brand instead of premier brand goods, for example.
  • I lived a couple of miles from the nearest railway station. Instead of driving there and parking each day, I walked (except when it was pouring with rain). Not only did I save money, but I got a little fitter, too.
  • Another way I was able to save money easily was by taking a packed lunch to work instead of ‘treating’ myself to a sandwich from the local sandwich shop each day.

In today’s terms, these simple changes in routine and ways of spending saved us more than £100 per week. £5,000 a year. Equivalent to an increase of around £6,500 (before tax) per year in salary.

Then there was the car. I loved my car at the time. Yet, it really is just a metal box with an engine to get you from A to B. Vehicles aren’t a passion of mine. I sold my car, and bought a cheap run-around.

Looking back, I don’t know how I managed to get into this financial dark place. Except actually, yes, I do! I started living to my means. As my wages increased, my mindset shifted.

When my wife and I first started living together, everything we owned was either second-hand or paid for. Suddenly, with hire-purchase deals and buy-now-pay-later purchases, we’d broken that golden rule.

I borrowed to buy furniture, carpets, and the car. When I didn’t have cash in my bank account, we didn’t stop going out. I used my credit card. I put foreign holidays on credit, too.

First things first – I cleared my overdraft with the proceeds from the sale of my car, and paid some off my credit card balance. I approached my bank manager, and got a consolidation loan.

Now I had one easy payment, at a lower overall interest rate. With the reduced amount of debt and a lower amount of interest to pay, I saved around £50 per week on my outgoings.

That was like having another increase of around £3,000 before tax (£2,500 net).

I didn’t stop there. Could I earn more? The easy way, of course, was to ask my boss for a raise, and if this wasn’t possible, how about overtime?

  • To cut a long story short, I stated my case for a rise, and received it. Then I asked if there was any overtime available. None going – damn!
  • Never mind, I started to work in a bar a couple of evenings a week. That gave me some variety in my life, and a few extra quid in my pocket.

Extra income from my increase in salary and the bar work was around £1,000 per month in 2023 cash.

These measures made a huge difference to my finances. Almost overnight, it was like having a salary increase of around £15,000 today.

However, this isn’t the beginning and end of this financial ‘trick’. Discipline is needed to feel the real effects of this.

I cut my credit card in two (but didn’t cancel it). Took cash out of the bank for our spending money – once that was gone, no more spending!

Most importantly, I started to pay myself first – putting money into one of the best savings accounts before my bills and monthly spending. I built up an emergency fund, so I never needed to borrow money to pay for a small emergency ever again.

The long and short of it is that you can feel like a higher earner by:

  • Saving money by reducing your spending.
  • Reducing your debt and borrowing costs, and eliminating debt as fast as you can.
  • Budget planning by paying yourself first.
  • Building and maintaining an emergency fund.

How To Push Into The Top Earners List

We can all always earn more. So far in this article, we’ve largely discussed how you can embed good financial habits to improve your personal bottom line – how much money you have available to you.

Being disciplined with your money is crucial to financial wellbeing.

Now, let’s take the next steps. Here are a few tips to help you move up the earnings ladder:

Invest In Yourself

The more knowledge and skills you possess, the more valuable you become. You could attend classes, take relevant certifications, or spend some time each evening completing online courses.

Don’t forget your soft skills! Good communication, leadership, and negotiation skills are all highly sought after today.

Ask For A Salary Increase

Prepare your case for a rise, then arrange a meeting with your boss. Highlight what you bring to the company, and your recent achievements.

Make sure you know what people in a similar role in your industry earn so that you can confidently gauge your true worth.

Ask For Extra Responsibility

Ask for a promotion, or if you can lead a project at work. Let your boss know that you’re ready to step up – you may even find that you’ll be supported to make the grade with a leadership course or personalised mentorship.

Consider Switching Jobs

Studies show that regular job switchers earn more during their life than those who remain in jobs for longer than two years. Few get rewarded well for their loyalty.

If you feel like you are undervalued by your boss, it may be time to start searching for new opportunities.

Diversify Your Income

Can you make extra money from your passions, or use your expertise in a consulting or freelance role?

Relying on a single job for your income can limit your earning potential. A second job (like the bar work I took) can provide a valuable boost to your earnings. So, too, could developing a side hustle, starting a small business, or investing for income.

Develop A Millionaire’s Mindset

Mindset plays a major role in your earnings journey. There are 7 keys to becoming a millionaire:

  1. Create a vision of wealth and a motivated mindset.
  2. Budget hard.
  3. Set your savings aside as soon as you’re paid.
  4. Have discipline in your spending to avoid costly debt.
  5. Learn new skills and earn more with them.
  6. Don’t succumb to society and spend when you can’t afford to.
  7. Make sure your money is being held in the best places and kept away from the most expensive.

Have a vision and financial plan, including increasing your skillsets and experience to improve your earning potential.

The Bottom Line

If you only look at your earnings, you won’t get a real picture of your financial wellbeing.

You might be surprised at what you’ll need to earn to get into the top 5% of UK earners, but a high income is only part of the equation.

Good financial habits, effective money management, and financial discipline are pivotal to ensure financial security, whatever you earn.

Whether your goal is to be a top 5% income earner or live a financially comfortable life, it’s not only about what you earn. It’s about how you use what you earn.

By investing in yourself, remaining financially disciplined, and seeking opportunities to utilise your passions, expertise and skills, you’ll improve your earnings potential and, most importantly, your quality of life.


DWP Income and Inequality Study

Statista UK Earnings Research

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