The 50/30/20 rule explained for UK pay
4 minute read
The 50/30/20 rule is a simple way to split your pay into three pots. It won't fit everyone exactly, but it is a good place to start if you have never budgeted before.
What the rule says
- 50% on needs: things you must pay, like rent, Council Tax, bills, food shopping and travel to work.
- 30% on wants: things you choose, like eating out, subscriptions, clothes and holidays.
- 20% on savings: money put aside for emergencies and goals, or paying off debts faster.
Always work it out from your take-home pay (the net pay on your payslip), not your salary before tax.
A worked example
If your take-home pay is £2,000 a month:
| Needs (50%) | £1,000 |
| Wants (30%) | £600 |
| Savings (20%) | £400 |
When to change the split
In many parts of the UK, rent alone can take more than half of someone's pay. If your needs come to more than 50%, that is normal. Try 60/20/20 or 70/20/10 instead, and keep the savings part, even if it is small.
If you have expensive debts, such as credit cards, some of the savings pot can go towards paying them off faster. For free help with debts, contact MoneyHelper or StepChange.
Making it work in practice
Turn the three pots into category budgets. For example, Needs might become Housing, Bills, Food and Transport. Then check them during the month so you know what is left before you spend.
BudgetHive Plus has an automated planner that does the split for you: type in your take-home pay, change the percentages or pound amounts, and send them straight to your budgets.
Try it with BudgetHive
Type in your take-home pay and BudgetHive suggests a starter budget you can change to suit you.
- Free plan
- No card needed
- No bank login
This guide is general information, not financial advice. BudgetHive is not authorised or regulated by the Financial Conduct Authority. For free, impartial help, visit MoneyHelper or Citizens Advice.