If you left the confines of university with your eyes firmly set on conquering the Capital, you’re not alone. Bustling with a quirky social scene and businesses galore, lots of us can’t wait to make London our new home.
But there’s often just the one small question of, can I afford it?
As a recent graduate it’s unlikely you’ll be earning the big bucks straight away and with the Capital notorious for its expensive living, is it really possible to live on an entry level salary?
Well, yes – over 1,000 of our graduates have! But to help you decide for yourself, we’ve unpacked three common thoughts most graduates have when looking to move to London.
“My entire salary will go on rent”
While it’s unlikely you’ll be living the high life in a penthouse apartment in Mayfair, you may find it can in fact work out cheaper to live in one of the more affluent areas.
When looking at rent prices, think about distance from the area you’ll be looking to work – is it worth paying a little more rent and saving on travel costs by walking or cycling? Or would it work out better to live in the suburbs and invest in a travel card? You can even grab yourself a cheaper deal on travel cards through companies like CommuterClub.
When calculating the cost of rent, remember to factor in the price of bills and tax. These change depending on where you’ll be living and how much you’ll earn. Just remember to do your research before jumping straight in, to make sure you’re getting the best deal for you.
“My student loan repayments will suck my bank accounts dry”
Unless you were one of the lucky few to have their university fees paid for, it’s likely your student loan debts have made it into the thousands of pounds. But fear not – you’re not expected to pay it back all at once!
Loan repayments start in the April after you leave your course and will only start if your salary is over the threshold amount. The threshold is a fixed amount and is currently either £17,335 or £21,000 depending on when you started your course. But you’ll only have to pay 9% on anything you earn over this threshold each month. Here’s an example to get your head around it:
If you’re an English or Welsh graduate who started studying on or after 1 September 2012, you don’t have to pay anything until you’re earning over £21,000.
So, if you start on a typical salary of £22,000 your repayments will be calculated like this:
£22,000 – £21,000 = £1,000
9% of £1,000 = £90
£90/12 (months in the year) = £7.5 (- this figure is then rounded down to the nearest pound)
So, your student loan repayment will only be £7 per month if you’re on a £22,000 salary Find out more about what you'll have to pay over on the Student Loans website.
“I won’t have any money left for a social life”
There’s no denying that London is a lot pricier than many of the other cities in the UK (and the world) when it comes to living costs. But the trick to ensuring you can enjoy the delights London has to offer, is to balance your budget.
Try making a budget plan. From your salary, minus all the biggest and most important things you definitely have to pay e.g. taxes, loan and rent. After this, list all other costs, plus all the other things you’d like to be able to do e.g. Phone bill, food, Netflix, Tea at the London cat café...everyday. Then it's time to decide where to make compromises.
The key is to be realistic – you probably won’t be able to afford every pop-up restaurant or quirky café you’ll hear about (at least not everyday). But if you research well and budget right, you’ll find you’ll be all set for a great start to life in the Capital.
All that’s left now, is to land yourself that all important job. If you’re still set on earning the big bucks, you might find the property, finance and recruitment sectors a good place to start - with the opportunity for speedy progression and bonuses to match.