The 50/30/20 budget, adapted for UK households
Split your take-home pay three ways: 50% on needs, 30% on wants and 20% on savings or paying off debt. It's simple enough to keep up with.
Start from take-home pay
Use what lands in your bank account after tax, National Insurance, pension and student loan. Not sure of the figure? Our take-home pay calculator works it out. Here's someone taking home £2,200 a month:
| Needs (50%) | £1,100 |
| Wants (30%) | £660 |
| Savings and debt (20%) | £440 |
| Total | £2,200 |
What counts as a need in the UK
- Rent or mortgage, Council Tax, energy and water
- Food shopping, travel to work and phone
- Insurance, the TV Licence (if you watch live TV or BBC iPlayer) and minimum debt repayments
Streaming, takeaways, gym memberships and holidays are wants, even when they feel essential.
Where savings go
The 20% covers an emergency fund first (aim for three months of needs), then extra debt repayments and ISA saving. If you're saving for a first home, a Lifetime ISA can add a government bonus.
When 50% isn't enough
In much of the UK, especially London, rent alone can be half of take-home pay. That's fine. Try 60/20/20 or 70/20/10 instead. The useful part of the rule is that you pick a savings figure on purpose and pay it first.
The 2027 UK Budget Planner checks your spending against 50/30/20 automatically, with 26 UK categories ready to go.
See the plannerGeneral information, not financial advice.