Quick Answer
120,000 is a strong salary in London, placing you above roughly 95% of earners. After taxes (~35.7% effective rate), your take-home is approximately $6,428/month. A 1-bedroom apartment averages $2,300/month (36% of net income).
Earning 120k in London places you in a specific position relative to local wages. Understanding this context helps you make informed career and financial decisions—whether you're considering a job offer, planning a relocation, or preparing for a salary negotiation.
London (pop. 9.0 million) is moderately expensive compared to global metros, with a cost of living index of 85 (NYC = 100). Average 1-bedroom rent is $2,300/month and a monthly transit pass costs $180. It's considered a top-tier global tech hub with a tech score of 9/10.
The question of whether 120k is "good" in London often reveals more about expectations than economics. For recent graduates, it might represent an exciting milestone. For experienced professionals, it could feel like a plateau. Context—your career stage, industry, and personal ambitions—shapes perception as much as data does.
Childcare and family costs in London can completely transform salary adequacy. Daycare, school supplies, extracurricular activities, and family healthcare add thousands to annual expenses. Families evaluating 120k should model these costs carefully, as they can consume 20-30% of take-home income in some markets.
Digital nomad and remote work trends have added a new dimension to salary evaluation. If you're earning 120k from a London-based employer but living part-time in lower-cost locations, your effective purchasing power increases substantially. However, tax implications of cross-border work arrangements can be complex.
Inflation trends in London directly impact whether 120k will feel the same in 12 months. Cities experiencing above-average inflation effectively give workers a pay cut each year if salaries don't adjust accordingly. Monitoring local CPI trends helps you anticipate whether your compensation is keeping pace.
The final dimension of salary evaluation is psychological. Research consistently shows that income satisfaction is relative—people compare themselves to peers, neighbors, and media portrayals. Understanding that 120k objectively provides a certain quality of life in London, regardless of what others earn, is key to financial contentment.
Is 120k a good salary in London in 2026?
120k is a very strong salary, placing you in the top 5% of earners in London. The local median salary is $52,000, so earning $120,000 puts you at the 95th percentile. After accounting for housing (average $2,300/month for a 1-bedroom), taxes, and daily costs, this salary allows for meaningful monthly savings.
How much tax will I pay on 120k in London?
On a gross salary of $120,000 in United Kingdom, you can expect an effective tax rate of approximately 35.7%. This means roughly $42,859 per year goes to taxes, leaving you with a net income of about $77,141 per year ($6,428 per month). The exact amount may vary based on deductions, filing status, and local levies.
What is the average rent in London in 2026?
As of 2026, the average rent for a 1-bedroom apartment in central London is approximately $2,300 per month, while a 2-bedroom averages around $3,200 per month. On a 120k salary, a 1-bedroom rent would consume about 36% of your after-tax income, which is a significant portion of income.
How does 120k in London compare to other cities?
Purchasing power varies by city, so 120k in London is not equivalent elsewhere. Adjusted for cost of living, the same standard of living would require approximately: New York ($141,600), San Francisco ($148,235), Berlin ($87,600). London has a purchasing power index of 78 (NYC = 100), meaning your money goes significantly less far than in New York.
What is the cost of living in London in 2026?
London has a cost of living index of 85 (where New York = 100), making it a moderately expensive city. Key monthly costs include: rent ($2,300 for 1BR), groceries (~$369), transport ($180), and utilities (~$128). Total monthly expenses for a single professional average around $3,190 before discretionary spending.
Can I save money on 120k in London?
On 120k in London, your estimated monthly take-home pay is $6,428 after taxes. With typical expenses of $3,190/month (rent, groceries, transport, utilities, and leisure), you could potentially save around $3,238 per month ($38,856/year). This provides solid room for building an emergency fund and investing.
Last updated: 2026-02-19 | Data sources: Numbeo, OECD, Glassdoor, and local government statistics.
Disclaimer: This page uses market data and cost-of-living sources for guidance. All figures and advice are estimates, not guarantees. Local conditions and personal circumstances may vary.
