How little can I live on?

In a world where living costs keep on rising, it begs the question – how little can you actually live on?
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Before we get started, here are a few caveats. This article is about the bare minimum amount of money you can live without becoming homeless, malnourished, or sick. We’ll also be looking at whether you’ll be able to put money away in emergency savings, to help prevent you from going into crippling debt if anything goes wrong.

How much does the government say is enough to live on?

To start, a good place to understand the minimum you can live on is to see what the government’s benefit caps are. Currently, these limits for a single adult are £13,400 a year for those that are outside of London and £15,410 a year for those in London. However, if you’re a couple or a single adult with a child, then your cap would sit at £20,000 outside London and £23,000 inside London.[1] In addition to this, the government also offer a Housing Benefit, which can help to pay part or all of your rent – which can reduce the impact of housing on any benefit claims.

Then we have the Minimum and Living Wage to consider too. For 2020/21 the minimum wage is set at £8.72 an hour, while the UK Living Wage is a bit higher at £9.50 an hour. Based on working a 40-hour week, minimum wage gives you £18,137.60 and the UK Living Wage would pay £19,760 a year. It’s worth pointing out here that the difference between them is that the Living Wage sets their minimum at what you need to live, rather than simply survive – so it includes some wriggle room for little luxuries and being able to save.

What does the public think?

This is far more varied than the government caps, and it also depends greatly on whether you’re living comfortably or just getting by. According to the Minimum Income Calculator, a single adult would need to earn a wage of £20,383 – or £325.26 a week – for a decent standard of living, while couples with no children would need £27,340 between the two of you (which is £13,670 each). But when children get involved, these costs creep up even higher. For example, a couple with two children in primary school would need to earn a combined £35,824 a year - £798.99 a week – to maintain a decent standard of living.

The Office of National Statistics has a different view on this again, stating that average weekly household spending in the UK was £587.90 in 2020. And although the coronavirus pandemic did slow down some spending, it wasn’t significantly down from the £603.10 a week they saw in 2019.[2] However, it’s worth bearing in mind that this is the average spending – not the least amount that you’d be able to live on.

What are the biggest costs?

Continuing with the ONS data, the average yearly household cost in the UK is currently £22,688. Here’s a quick breakdown of what households spend their money on and how much they spend each year:


How much?

Food and drink




Holidays and entertainment






Council tax


Phone and broadband








Perhaps unsurprisingly, the largest cost for most people is food and drink, as this is pretty essential to staying alive and well.

However, as these figures are UK averages, then chances are you could live on less than this. For example, the third-largest expense is holidays and entertainment – sitting at £3,999 a year – which are luxuries, and instead of indulging in these, this money could be put into your savings or stocks & shares ISA instead.[3]

Can you live on £1,000 a month?

Simply put, yes. But that does depend on where you’re living, what your responsibilities are, and if anyone is financially dependent on you.

There are a few tricks to this, but it all starts with budgeting. We’ve seen what the government and statistics show are the minimum and average amount of money to live on, but you could bring the cost of your expenses down by removing anything that’s considered a luxury – such as holidays and entertainment – before looking at whether you could start saving money on more essential things.

Look at your bills

Checking your utilities could be a great place to start. Although the number of people moving energy suppliers each year has grown since 2015, it still only accounts for around 25% of people.[4] This is important because if your contract ends then you’ll likely be put in ‘out of contract’ rates which can be significantly more expensive. Luckily though, there are many websites out there that will let you quickly compare and switch suppliers, you might be surprised by how much you could save!

Think about your food

Next, you may want to look at how to reduce the cost of your food shop. The key here is planning. Plan, plan, plan, then budget, and then plan some more. Although it may feel like only buying bits and pieces when you need them could save you money, the reality is that doing one big shop could be a much better approach. You’ll have fewer opportunities for spontaneous purchases, and can take advantage of bulk discounts. By planning you can also carry out some sense checks – there’s nothing worse than buying something to find you already have it in the cupboard at home.

Some online bloggers actually claim that they can get their weekly shop down to £18,[5] and while that may not suit everyone, it does show what’s possible if you put your mind to it!

Transportation costs

Unfortunately, public transport in the UK is expensive – one of the most expensive in Europe[6] – and there’s not much you can do to avoid that. However, not much isn’t nothing! If you take the train regularly, then you could look at getting a season ticket – many employers even offer a 0% loan to help pay for the cost of this monthly, rather than in a large chunk. Alternatively, try to book your journeys in advance – while the UK does have some of the most expensive train tickets on the day, they’re much more affordable if booked a month in advance.[7]

If you drive, then there are several areas where you can reduce the cost of your car. For a start, by deciding whether or not the journey is needed – if it’s a quick trip to the shops, it may be cheaper (and healthier) to go for a quick walk. If you do need to drive somewhere, then making sure that you’re driving economically could help you save money on fuel. And, of course, it’s always worth checking that you’re not overpaying on insurance!

Pensions and investments

This might not apply to everyone, but if you have pensions or investments, then you’ll want to make sure that you’re not paying over the odds on any fees. This is important when it comes to planning for the future, as you may want to be taking a long-term approach to any pensions and investments you have because market performance goes up and down. If this is the case, and your fees are high, they’ll eat into your returns, which could leave you worse off.

It’s worth searching around for better rates, or even looking to combine all your workplace pensions in one place to make sure you don’t lose track of it! Before making a move, however, it’s worth checking whether your old provider charges an exit fee, and if so, how much it is. While many pensions can be moved, there are some that won’t be able to be consolidated – for example, government pensions or ones with defined contributions or benefits.

Try to keep saving

It may seem counterproductive but continuing to put money away when times are tight can be really helpful – especially if you come across big, unavoidable costs. Having some savings to fall back on instead of going into debt could help you continue to live frugally. 

Trialling the FIRE movement?

If you’re choosing to live frugally, then you’re already along the right lines to join the FIRE movement. For those not in the know, this stands for ‘Financial Independence, Retire Early’ which is exactly what it says on the tin. Many of the people who are chasing this goal will try to live off as little as they can now so that they can put more money into their savings, investment ISAs, and pensions for later in their life.  So, for example, if you earn £2,000 a month then you’d try to live off £1,000 or less and put the rest of your money away with the idea of retiring as early as possible.

Sound like this is right up your street? Then check out our ultimate guide to the FIRE movement.



Please remember the value of your investments can go down as well as up, and you could get back less than invested.


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