If you've ever googled "how much should I save from my salary," you've probably been hit with the same answer everywhere: 20%. The 50/30/20 rule. Half your income on needs, 30% on wants, 20% on savings.
Which is great if you earn enough for that to make any sense at all.
For a lot of people in the UK right now, saving 20% of your salary feels about as realistic as buying a house with cash. Rent alone can eat up 40 or 50% of your take home pay, especially if you live anywhere near a city. So where exactly is this magical 20% supposed to come from?
Here's the thing though. The "right" amount to save isn't a fixed number. It depends on what you earn, what your life costs, and what you're actually trying to do with your money. Let's figure out what makes sense for you.
The General Guidelines (and Why They're Only a Starting Point)
You'll see these numbers thrown around a lot, so let's get them out of the way:
- The 50/30/20 rule: 50% on needs (rent, bills, food, transport), 30% on wants (eating out, subscriptions, clothes), 20% on savings and debt repayment.
- The 10% minimum: Some financial advisers say if 20% is too much, aim for at least 10% of your take home pay.
- The "anything is better than nothing" rule: Even £25 a month adds up to £300 a year. That's not nothing.
These guidelines exist because they're simple. Simple is good for getting started. But they fall apart when you apply them to real life, because real life is messy.
Someone earning £45,000 in Manchester has a completely different financial picture to someone earning £25,000 in London. Same country, totally different maths.
What's Realistic at Different Income Levels
Let's look at some actual numbers. These are rough illustrations, not prescriptions. Your situation will be different, but this gives you a sense of what's possible.
Earning Under £25,000
Take home pay is roughly £1,700 to £1,850 a month depending on your tax code and pension contributions.
If your rent or mortgage is £700 or more (which is pretty standard), and your bills, food, and transport come to another £500 to £600, you might have £300 to £500 left over. Some months less.
Saving 20% of your take home (£350 to £370 a month) might be genuinely impossible. And that's fine. Saving 5 to 10% (£85 to £185 a month) is a more realistic target. Even £50 a month is progress.
At this level, the priority is building a small emergency buffer, even just £500 to £1,000, so that one surprise expense doesn't send everything sideways.
Earning £25,000 to £40,000
Take home is roughly £1,850 to £2,650 a month. This is where a lot of UK workers sit.
You've got a bit more breathing room, but costs scale up too. Maybe you've moved somewhere with higher rent, or you're running a car, or you've got kids.
Aim for 10 to 15% if you can. That's £185 to £400 a month. If you're paying off debt, split that savings target between debt repayment and actual savings.
Earning £40,000 to £60,000
Take home is roughly £2,650 to £3,500 a month. This is where the 20% rule starts to become achievable for a lot of people, but lifestyle inflation is the enemy here.
The danger at this income level is that your spending grows to match your earnings. You get a pay rise, you upgrade the flat, you eat out more, you grab a nicer holiday. Before you know it, you're earning significantly more but saving about the same as before.
Target 15 to 20%. Automate it so it leaves your account before you get used to having it.
Earning Over £60,000
If you're in this bracket, you should be able to save 20% or more comfortably, unless you're living in central London or have significant financial commitments.
Aim for 20 to 30%. At this level, you should also be thinking about where that money goes. Is it sitting in a current account earning nothing? Could it be in a stocks and shares ISA? Are you maxing out your pension contributions?
The "Pay Yourself First" Method
This is probably the single most useful savings concept out there, and it's dead simple.
Instead of spending your salary and saving whatever's left at the end of the month (spoiler: there's usually nothing left), you flip it around. The day you get paid, move your savings amount out of your current account immediately.
Set up a standing order for the day after payday. Your savings leave your account before you even see them. Then you live on what's left.
This works because of basic human psychology. If the money is sitting in your current account, you'll spend it. Not because you're bad with money, but because that's just what happens. Removing the temptation is the whole trick.
Start with whatever amount feels comfortable. Even £50 or £100 a month. You can always increase it later when you've adjusted.
How to Figure Out YOUR Number
Forget the generic percentages for a minute. Here's a more useful approach:
Step 1: Know What You Actually Spend
Before you can figure out how much to save, you need to know where your money is going right now. Check your bank statements for the last three months. Not a vague guess. Actual numbers.
Add up your fixed costs (rent, bills, subscriptions, debt repayments, insurance, transport). Then look at your variable spending (food, going out, shopping, random stuff).
Most people are genuinely surprised by this exercise. That £3.50 coffee every weekday is £70 a month. Those Deliveroo orders add up faster than you'd think.
Step 2: Define What You're Saving For
Saving without a goal is hard because there's no motivation behind it. Get specific:
- Emergency fund: 3 to 6 months of essential expenses. If your essentials are £1,500 a month, you're aiming for £4,500 to £9,000.
- House deposit: How much do you need? When do you want to buy? Work backwards from there.
- Holiday: A £2,000 holiday in 10 months means saving £200 a month.
- Retirement: Your workplace pension counts here, but you might want to top it up.
When you attach a specific purpose to your savings, it's much easier to prioritise them.
Step 3: Find the Gap
Take your monthly income. Subtract your fixed costs. Subtract a realistic amount for variable spending (don't kid yourself by putting £100 for food if you always spend £250).
Whatever is left is your maximum possible savings. Now decide: how much of that do you want to commit to saving, and how much do you want as breathing room?
A good rule of thumb is to save at least half of your "leftover" money. If you've got £400 left after all expenses, try to save £200 and keep £200 as a buffer for the unexpected stuff that always comes up.
Step 4: Test It for Two Months
Whatever number you land on, try it for two months. If it feels manageable, great. Stick with it or nudge it up by £25 to £50. If you're constantly dipping into savings to cover normal expenses, it's too aggressive. Drop it down. No shame in that.
The best savings rate is one you can actually maintain. Saving £300 a month consistently beats saving £500 for two months and then giving up.
What About Debt?
If you've got debt, especially high interest debt like credit cards or overdrafts, the maths changes. Paying off a credit card charging 22% interest is a better "return" than putting money in a savings account earning 4%.
The general advice is:
- Build a tiny emergency fund first (£500 to £1,000), so debt repayment doesn't get derailed by a surprise bill.
- Then throw everything you can at the highest interest debt.
- Once that's cleared, redirect those payments into savings.
You don't have to choose between saving and paying off debt, but the split should lean heavily toward debt if the interest rates are high.
Tricks to Save More Without Thinking About It
Beyond "pay yourself first," here are a few things that actually work:
- Round up apps: Your bank might offer this. Every time you spend, it rounds up to the nearest pound and moves the difference to savings. It's small, but it adds up.
- The 1% method: Start by saving 1% of your salary. Next month, bump it to 2%. Keep going until you feel the pinch, then hold there. By the time you get to 10%, you've barely noticed the change.
- Separate accounts: Keep your savings in a different bank entirely. The friction of transferring money back makes you think twice about dipping in.
- Save your raises: Got a pay rise? Increase your standing order by the same amount. You were living on the old salary, so you won't miss it.
- Bill audit: When was the last time you checked if you're overpaying on energy, broadband, or insurance? Switching can free up £50 to £100 a month without changing your lifestyle at all.
So, How Much Should You Actually Save?
Here's the honest answer: as much as you reasonably can, without making yourself miserable.
If that's 5% right now, great. If that's 25%, brilliant. The number matters less than the habit. Someone saving £100 a month consistently will end up in a better position than someone who saves £500 one month and nothing for the next three.
Start where you are. Automate it. Revisit it every few months. Increase it when you can.
If you're not sure where to start, take Steward's free money quiz. It looks at your income, your spending, and your goals, then gives you a personalised plan, including exactly how much you should be putting away each month. No guesswork, no generic percentages. Just a number that actually works for your life.
The fact that you're even thinking about this puts you ahead of most people. Now set up that standing order and let the habit do the heavy lifting.