Money guide for new UK graduates: your first steps

Your first payslip can be confusing. Here's what appears. Gross salary: your total pay before deductions. Income tax: collected through PAYE, based on your tax code (usually 1257L = £12,570 tax-free). National Insurance: deducted at 8% on earnings between £12,570 and £50,270, then 2% above. Pension contribution: if you're auto-enrolled, around 5% of qualifying earnings. Net pay: what hits your bank account. Check your tax code — if it's wrong, you may over or underpay tax. If you have multiple jobs, your tax code may be adjusted. Student loan repayment: starts automatically when earnings exceed your plan's threshold — 9% deducted above it. In 2026/27 that's £25,000 for Plan 5 (English students who started courses from August 2023, which includes most 2026 graduates of three-year degrees) and £29,385 for Plan 2.

As a new graduate with regular income, budgeting becomes essential. Calculate your monthly take-home pay. List fixed expenses: rent, council tax, utilities, transport, phone, insurance. Set spending categories: groceries, social, hobbies. Use the 50/30/20 rule as a starting point: 50% needs (rent, bills, transport), 30% wants (social, hobbies, dining out), 20% savings (emergency fund, pension). Track your spending for the first month to see where money goes. Use your banking app or a simple spreadsheet to categorise it, and SYM to put aside a little for savings each day. Adjust based on your actual spending patterns.

Your student loan is different from other debt. It's repaid through payroll — 9% of income above the threshold (£25,000 for Plan 5, £29,385 for Plan 2 in 2026/27). It's automatically deducted — you don't choose to repay. Any balance left is written off after 40 years on Plan 5 (30 years on Plan 2) — repayments depend on what you earn. It doesn't affect credit score — lenders see it differently from other debt. It doesn't mean you can't get a mortgage — lenders assess affordability, not loan balance. Don't overpay voluntarily — unless you're on a very high salary, it's usually better to let it be repaid through payroll. The loan amount doesn't matter for repayment — only your income matters.

If you're employed, you're likely auto-enrolled into a workplace pension. Here's why it matters. Employer contributions: they'll contribute at least 3% of your qualifying earnings — free money. Tax relief: the government adds 20% automatically — more if you're a higher rate taxpayer. Time is everything: starting at 25 instead of 35 could mean £100,000+ less in your pension. Even small contributions matter enormously. If your employer offers to match extra contributions, always say yes. If you opt out, you're turning down free money. Check your pension contributions are being made and consider increasing them as your salary grows.

An emergency fund protects you from unexpected costs. Start with £500-£1,000 as a mini emergency fund. Then build to 3 months of essential expenses. Keep it in an easy-access savings account. This covers: car repairs, broken phone, job loss, unexpected bills. It prevents you going into debt when surprises happen. Building an emergency fund takes time — start with whatever you can, even £25/month. Use the SYM app to track your progress. As your income grows, increase your target.

New graduates often make these money mistakes. Lifestyle inflation: resist upgrading everything now that you earn more. Buy a decent car: fancy cars depreciate massively. Finance everything: avoid high-interest credit. Ignore pension: it's boring but crucial. No savings buffer: unexpected costs happen to everyone. Not tracking spending: you can't improve what you don't measure. Comparing to others: everyone's situation differs. The key: live below your means, save consistently, and start early.