Money Advice by Age UK 2026 — What to Prioritise Every Decade First Job Money Checklist UK — Graduate Finance Guide Complete financial guide for your first job UK. Understanding payslips, tax codes, pensions, budgeting on starter salary, and building good money habits from day one.
By James Whitfield
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23 March 2026
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Last reviewed: 16 September 2026
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5 min read Starting your first proper job? Here’s everything you need to know about money.
Understanding Your Pay Gross vs Net Pay Term Meaning Gross salary Before deductions Net pay What you take home Deductions Tax, NI, pension, student loan
Example Payslip Breakdown £28,000 Salary (Monthly) Amount Gross pay £2,333 Income Tax £257 National Insurance £103 Pension (5%) £117 Student loan (Plan 2) £0 Net pay ~£1,856
Key Payslip Items Item What It Is Tax code Determines tax (1257L is standard) NI number Your unique ID NI category Usually ‘A’ YTD figures Year to date totals
Tax Basics What You’ll Pay (2026/27) Income Band Tax Rate £0 - £12,570 0% (Personal Allowance) £12,571 - £50,270 20% (Basic rate) £50,271 - £125,140 40% (Higher rate)
National Insurance Earnings NI Rate Below £12,570/year 0% £12,570 - £50,270 8% Over £50,270 2%
Tax Codes Explained Code Meaning 1257L Normal (£12,570 allowance) BR All pay taxed at 20% 0T No allowance W1/M1 Emergency/week-month basis
If Wrong Tax Code Signs Action Much less pay than expected Check code W1/M1 on payslip Emergency tax Contact HMRC or employer Refund Will come through pay or rebate
Student Loans Repayment Thresholds (2026/27) Plan Start Repaying Above Plan 1 £26,900/year Plan 2 £29,385/year Plan 4 (Scotland) £33,795/year Plan 5 £25,000/year Postgraduate £21,000/year
Repayment Rates Loan Type Rate Plan 1 9% above threshold Plan 2 9% above threshold Plan 4 9% above threshold Postgraduate 6% above threshold Both? Both deducted
Example: Plan 2 on £28,000 Calculation Amount Income £28,000 Threshold £29,385 Above threshold £0 (below threshold) 9% of above £0 (no repayment due)
Workplace Pension Why You Should Stay In Benefit Value Employer contribution Free money (min 3%) Tax relief Boost your contribution Compound growth Decades to grow
Minimum Contributions Who Pays Minimum Employer 3% You 5% (4% after tax relief) Total 8% minimum
Example: £28,000 Salary Contribution Annual Amount You (5%) £1,400 Employer (3% free) £840 Tax relief boost ~£350 Total into pension ~£2,590
Auto-Enrolment What Happens Detail Automatic You’re enrolled Can opt out But shouldn’t usually Re-enrolled Every 3 years if opted out From Usually after 3 months
Your First Budget Typical Graduate Budget (£1,856/month take-home) Category Amount % Rent £700 38% Bills (energy, internet, phone) £150 8% Groceries £200 11% Transport £150 8% Savings £200 11% Debt repayment £50 3% Everything else £406 22%
Living with Parents If Rent-Free/Low Opportunity Save more Build deposit fund Pay off debt Clear faster Emergency fund Build quickly Don’t lifestyle creep Save the difference
Building Emergency Fund Target Goal Amount Initial target £1,000 Then 3 months expenses Long-term 6 months expenses Typical £4,000-6,000
Where to Keep It Account Type Why Easy access savings Instant access Not current account Separate from spending Decent rate Check best buys Not invested Need stability
Savings Priorities Order of Priority Priority What 1 Get employer pension match 2 Pay off high-interest debt 3 Emergency fund (£1,000) 4 Full emergency fund (3 months) 5 Additional savings/investing
Where to Save Type Purpose Emergency fund Easy access saver House deposit Lifetime ISA (25% bonus) General savings Cash ISA Long-term Stocks & Shares ISA
Banking Setup Recommended Accounts Account Purpose Main current account Salary in Bills account Standing orders Savings account Emergency fund Spending account Weekly budget
Good First Banks Bank Why Monzo Good app, budgeting pots Starling Great features Chase 1% cashback spending High street If prefer branches
Standing Orders Set Up For Pay day To bills account Pay day To savings account Pay day To spending account Automate So you don’t forget
Credit Score Building Credit Early Action Impact Electoral roll Register immediately Direct debits Shows reliability Credit card Small, pay in full Phone contract Counts if in your name
Mistakes to Avoid Don’t Why Miss payments Damages score Max out credit High utilisation bad Apply for lots Multiple searches hurt Ignore it Affects future borrowing
Avoiding Debt Good vs Bad Debt Good Debt Bad Debt Student loans Credit cards carried Cheap mortgage Payday loans 0% finance (if needed) Car finance (if unaffordable)
Danger Signs Warning Action Credit card not paid in full Budget problem Using overdraft monthly Cut spending Borrowing for basics Seek advice
Employee Benefits Check What’s Offered Benefit Value Pension match Take maximum Cycle to work Tax-efficient bike Season ticket loan Interest-free travel Health insurance Can be valuable Gym discount If you’d use it Shares scheme Often good terms
Tax-Free Savings Lifetime ISA Feature Details For House deposit or retirement Bonus 25% on up to £4,000/year Max bonus £1,000/year Withdrawal For first home penalty-free
Cash ISA Feature Details Tax-free Interest not taxed Allowance £20,000/year (all ISAs) Access Easy (most)
Summary Week One Actions Task Done? Check payslip is correct ☐ Understand deductions ☐ Join workplace pension ☐ Set up budget ☐
Month One Actions Task Done? Open savings account ☐ Set up standing orders ☐ Start emergency fund ☐ Register on electoral roll ☐ Check benefits offered ☐
Year One Targets Goal Target Emergency fund £1,000+ Pension Stay enrolled Budget Living within means Credit score Building steadily Savings habit 10%+ of income
Key Numbers to Know Number What £12,570 Personal Allowance £29,385 Plan 2 student loan threshold 8% Minimum pension contribution 25% LISA bonus 3 months Emergency fund target
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