£40K for CFI sounds reasonable to me.
As for earning a livable living - forget it - unless you have other means of earning or have savings/wealthy family. Yes, they're are some guys around who're on a salary and just about scraping by but the majority simply instruct as a cheap way of building hours, which as you say, is bad for the industry. Owing to the fact many newly qualified instructors have higher outgoings than most due to borrowing for their licence, the money is pitifull.
I certainly do not make a living from it.
VFE.