Latest news with #highEarners
Daily Mail
4 days ago
- Business
- Daily Mail
I earn £100,000 a year but don't feel rich - I've downgraded to PureGym and holidays in Europe, ditched M&S groceries and only eat out once a week
A Gen Z professional who earns £100,000 a year insists that, despite having no dependents to care for, he doesn't 'feel rich at all'. Jack Kim, 28, works as a strategy consultant and brings home around £6,000 a month after tax but calls himself a 'HENRY' – which stands for 'high earners not rich yet'. HENRYs are young people in the UK's top 10 per cent of earners who say they are left with little at the end of the month after bills, taxes and lifestyle inflation. Living in central London in a two-bedroom property he bought with his partner for £550,000, Jack – who covers all their expenses – says he is feeling the cost of living. His monthly expenses include £2,630 on his mortgage payment and council tax, £420 in bills, £250 on groceries and £400 for socialising. Jack claims he's had to adjust his lifestyle due to cost-of-living – ditching a weekly M&S shop for Sainsbury's, having to swap luxury holidays in Asia for European mini breaks and opting for Pure Gym instead of the more expensive chain Gymbox. Jack, from East London, said: 'Even though I'm on a six-figure salary, I don't feel rich at all. Jack pays £2,630 a month for the mortgage and council tax on the two-bedroom flat he shares with his partner 'Everyone knows living in London is extremely expensive. 'It comes to four main things – higher tax rate for people on six-figure salaries, higher living costs, lifestyle inflation and debt. 'As income rises, so does your lifestyle. 'I don't wear flashy, high-end clothes or own expensive watches, I opt for high street brands like Uniqlo. 'We try and live below our means by limiting eating out to once a week at a good quality restaurant. 'Other than a drink at special occasions like weddings, I don't drink alcohol, which is very expensive. 'We feel the cost of living just like anyone else. I don't feel upper-middle class.' Jack sends £500 a month to his parents in South Korea and after all his expenses are paid, he's left with about £320 which goes on clothes, one-off expenses such as gifts or saving for a holiday. After graduating from the London School of Economics with a bachelor's and master's degree in management in 2019 – which cost £99,000 in tuition fees – Jack began his career as a strategy consultant on a £21,000 salary. He quickly progressed to £45,000 and began saving for a £82,000 deposit to buy a property with his partner. 'We collectively needed roughly £82,000 for a deposit, and we did that in two years with some help from our parents,' Jack said. 'It meant we stopped eating out and primarily cooked at home. During that time, it was Covid which did help because it meant we weren't spending as much or travelling at all.' And in December 2021, Jack and his partner got on to the property ladder, purchasing their two-bedroom flat. 'Being on a combined income helped us for sure, but alongside our own drive and determination,' he added. 'I can only imagine how hard it is for young people to get on the property ladder now. Especially if they're single and doing it alone. 'Affordability and the goalposts for a mortgage have changed – even in the last four years. Despite getting several pay rises since the start of his career, the 28-year-old doesn't feel it's made a big difference to his lifestyle 'It's not affordable to get a mortgage these days – unless you have generational wealth. 'Growing up, my family and I were considered a lower-income family. From the ages of seven to eight, my mum, dad, brother and I lived in a studio flat in Seoul, South Korea. 'Since gaining my education and career in London, I'd say as a whole, my family are middle class. But we certainly don't feel it in the grand scheme of things. 'I don't have an expensive watch or a car. No luxury yacht or Monaco, St Moritz holidays like my friends who are bankers. 'Consulting is an industry where you can see fast income growth. Even though my income has increased, our lifestyle hasn't changed that much.'
Telegraph
20-06-2025
- Business
- Telegraph
Young, ambitious, earn a high-income? Starmer's Britain is out to crush you
Today's borrowing figures, with the deficit rising even though tax levels are at a record high, makes it seem ever-more inevitable that Chancellor Rachel Reeves will seek to raise taxes further this autumn. High taxes have already driven away many non-doms and many millionaires – contributing to Reeves' previous tax rises raising less than was hoped. But could high taxes and a declining lifestyle in the UK drive away people further down the income scale? Could a 'wealth drain' become more widespread? One emerging candidate is the so-called 'Henry' – someone who is a High Earner but Not Rich Yet. Political analysis suggests that this group is starting to feel let down by Starmer's Government, despite many of them having voted Labour in 2024. Could this discontent lead to many of them leaving the country? There may be some scope. Some of the trade agreements the UK has signed in recent years include provision for fairly easy migration for work for young professionals. The American H-1B visa scheme for high-skill professionals has been streamlined recently and there has been speculation that it could be eased for British applicants – perhaps as part of a wider UK-US trade deal. High earning young British professionals would be welcomed in many countries. On the other hand, some of the same factors that mean these people are not rich yet may tend to make a move out of the UK an upheaval. Often they are not rich yet because they have children, for whom moving abroad may be a wrench. Also, since by definition they are not rich yet, they may lack resources to make a move and provide a buffer in the early months and years. Maybe it wouldn't be the Henrys themselves who would move? Perhaps by the time one is a Henry it's already too late? Maybe the time to move is a little earlier, when a Henry future can be seen awaiting – decades of financial struggle despite high income; what a friend of mine once referred to as 'being broke at a higher level'. Young professionals on the way up may be able to move abroad when Henrys could not. Either way, it's a grim time to be in the earnings brackets that the Government is targeting to raise taxes. And with unsustainable finances, no political appetite to cut spending, and persisting threats of an economic downturn – whether from Trump's tariffs, the Iran situation or the broader economic backdrop – things seem likely to get worse for high tax payers before they get better.
Times
13-06-2025
- Business
- Times
Why just over £100,000 is the worst salary you can earn
Last week, Moneyreported on the plight of the Henrys — High Earners, Not Rich Yet — and how Britain's tax system leaves those earning £100,000 feeling the pinch. Anyone earning above £100,000 a year after pension contributions (their 'adjusted net income') starts to lose their tax-free personal allowance of £12,570, at a rate of £1 for every £2 of earnings. It means those earning between £100,000 and £125,140 face a marginal tax rate of 60 per cent. • On £100k and struggling: why it's hard being a Henry At the same time, parents earning £100,000-plus lose 15 hours of free childcare a week and the government's tax-free childcare scheme, worth up to £2,000 a year per child. We asked readers for their experiences of being caught in the £100,000 tax trap, and what they did to mitigate it. Here are some of your stories. Louise Adams*, 46, an NHS consultant from southeast England I've been an NHS consultant for about six years. My pre-tax income is about £105,000 after my NHS pension contributions. My professional memberships (I can deduct from my taxable income) cost me another £3,000, and then I pay a bit extra into a self-invested personal pension to get my adjusted income down to £99,500, to avoid that £100,000 cliff edge. There's an awful lot of us in the same position. Pretty much anyone who's been appointed as a consultant in the past five years if they have children who are not yet at school will be in the same situation. If you have more than one child, it's even worse. It's one of the significant reasons for the waiting list and out-of-hours cover problems in the NHS, as it's not financially viable to do any extra shifts. I'm a single parent with a three-year-old daughter, so all the costs and care fall on me. I get 30 hours a week free during term time for about 38 weeks a year, plus the tax-free childcare is worth another £2,000 a year. I have someone who comes in at about 6.30am and looks after her until 7pm when I get home, then she goes to nursery two and a half days a week. Outside of the free hours, childcare costs me about £17 an hour, which totals about £40,000 a year. Frankly, I'm very lucky, I've got lots of family around and my parents also make contributions towards the paid-for childcare. I would be paid £100 an hour for any extra shifts, or £125 if it were outside 7am to 7pm. But I would lose my personal allowance, I would lose free childcare hours and my tax-free childcare, and I would have to pay for childcare for my daughter when I was working. So it would cost me more money to work extra shifts than I would earn, it's bananas. During the recent strikes when I came in, it actually cost me money to help keep my department safe. There are always extra unfilled shifts, someone might be ill, or there's a clinic on evenings and weekends in a bid to reduce waiting lists. More people would do those, but it's not financially worthwhile. It's a slightly valid criticism that I shouldn't complain as much about childcare costs as I'm a single parent by choice, but it doesn't negate the fact that I would do more work and help the NHS out if the system didn't leave me worse off for doing so. James Preston, 57, an occupational health doctor from north London I'm not pleading poverty. I am in a very fortunate position. I'm single with no children, so I don't have the same financial pressures of some of my friends who have children and are still recovering from things like paying school fees. But the £100,000 rule just feels like a cliff edge. The fact that the marginal rate goes up to 60 per cent and then comes down again feels unfair and arbitrary. I have no problem with being taxed proportionately if you earn more money, but there is already a system in place for that with the 20 per cent, 40 per cent and 45 per cent for the highest tax bracket. To lose the personal allowance that is given to everybody feels like you are targeting a very specific demographic. I've had a salary just below the £100,000 mark, and when I was self-employed, I worked flat out to take my earnings above £100,000. If you earn over £100,000, you do just think: 'Why am I volunteering to add work to my diary if I am going to take substantially less in pay back home with me?' I've definitely made a conscious decision in the past to not earn over £100,000 to avoid paying the marginal rate. It's a concern for me that this is a disincentive for people to work. There is a shortage of people with skills and particularly marketable skills that command a higher income. It's a disincentive for these people who have the luxury to turn down work to keep under £100,000. Erica Jackson*, 36, from southeast London, who works for a sustainable food company We have one-year-old twins and because my salary is above £100,000, while my partner earns £70,000, we get none of the tax-free childcare benefits or the free hours from the government. My children go to a childminder, who they love, for just three days a week. Our yearly childcare bill is still £24,800, and would probably be about £18,000 if we got the free hours and other benefits. We are very fortunate, we earn well and I am really aware that there are lots of people in more difficult positions than us. But it shouldn't be one size fits all, and the £100,000 rule shouldn't be set in stone if you have two or three children going through childcare at the same time. I think it's unfair; we have friends earning £99,000 and they are much better off because they get the hours. • Why a £2,000 pay rise can cost you £12,000 It's not just the childcare costs either — with twins, everything hits at the same time. For example, you can't buy a car seat and pass it down. You have to buy two at the same time, two high chairs, two cots. We just couldn't have any more children, absolutely not — the only way we could do it would be to wait until they were in school. Because I earn £125,000 it means that I miss out on the full £12,750 personal allowance. I wasn't aware of these rules and when I was younger, I was just always pushing for a higher salary. I didn't realise it could get more difficult. We rent at the moment and pay £2,400 a month to live in southeast London. We are trying to save for a home but we are now having to dip into these savings just to get by each month. Philippa Henderson*, 39, from Hampshire I'm frequently told: 'Just put anything over £100,000 into your pension.' But the reality is my pension is in good shape, and I need every penny of my income now. I have two young children, but because I earn £130,000 a year I have lost all my childcare allowances. At the same time, we've got a mortgage that costs us £3,500 a month and my commuting is £600 a month. I'm the higher earner in my marriage, and it's annoying that if my husband and I both earned £90,000 we would pay less tax overall and still receive childcare help. I do not mind paying tax — in fact, I wouldn't want to live in a society where rich people get away with paying very little — but the £100,000 threshold is not the level of wealth it seems. We do not have a flashy lifestyle. We drive a clapped-out old car and go to Cornwall once a year. We do have a cleaner but she recently dropped her hours because her benefits have gone up so she doesn't need to work as much. Meanwhile, I'm working 50 hours a week and paying for any help I can get. I tell myself it's just a phase and it'll get easier when our children go to school, because we're going to be using a state school so at least that will be free. Darren John, 57, a pension consultant from London I now pay everything over £100,000 into my pension. I can't see a time when I'll ever take any pay greater than £100,000 as a salary. Working to pay 62 per cent of my income to HMRC is nonsensical. What makes it worse is when you see the government and others suggesting it's not fair that we get higher rate tax relief on those same pension contributions, even though we feel obliged to make them. It's a vicious circle created by a ridiculous tax system. I certainly don't have any issue paying my fair share but a tax rate of nearly two thirds cannot be fair in any reasonable person's mind. As an experienced pension consultant, I'm acutely aware of how we arrived in this position through successive governments, which makes me very cynical of the whole regime. Pensions are the one workaround, and these are now coming under attack by this government, which is greatly concerning. The temptation to move abroad is becoming an increasingly realistic option. *Names have been changed What other parts of the tax system need fixing? Share your thoughts in the comments below
Telegraph
28-05-2025
- Business
- Telegraph
Earn over £200k? HMRC could be snooping on you
If you earn over £200,000, you may have had your finances snooped on by the taxman. High earners or those with over £2m in assets are defined as 'wealthy' by HM Revenue and Customs (HMRC). This means a specific team within HMRC is dedicated to ensuring these taxpayers pay the right amount. While the so-called 'wealthy' team has always existed, recently it has ramped up its investigations. According to a recent report by the National Audit Office (NAO), the tax office collected £5.2bn from the wealthy in 2023-24, up from £2.2bn in 2019-20. HMRC has said this tax would have been lost if not for its interventions. In 2023-24, 850,000 individuals – or 2pc of taxpayers – met HMRC's definition of 'wealthy'. Of these, 395,000 had an income of more than £200,000 while the remaining 455,000 had assets worth more than £2m. Around 2,500 taxpayers were worth over £100m.
Yahoo
26-05-2025
- Business
- Yahoo
Rayner's tax plans would ‘accelerate exodus of Britain's wealthy'
Angela Rayner's proposed tax raid on savers and high earners would accelerate the exodus of Britain's wealthy, a leading global wealth adviser has warned. Rich people will leave the UK in greater numbers if the Deputy Prime Minister succeeds in her efforts to tax wealth more, Henley and Partners said. Philippe Amarante, the firm's head of private clients, told The Telegraph: 'What I hear from people is their response to this will most likely be 'I want out'.' 'If a country like the UK continues to make its fiscal balance sheet healthier by taking away from those who have more, those who have more will become fewer. The equation will not work.' The firm, which has 60 offices globally, is one of the world's largest investment migration consultants and benefits when the wealthy are on the move. Last week a leaked memo emerged revealing that Ms Rayner has been pushing for the Chancellor to raise taxes in order to avoid further spending cuts. The Deputy Prime Minister suggested several measures that would hit well-heeled Britons the hardest, such as equalising levies on dividends and income, and taxing pension pots more. She also suggested extending the freeze of the £125,140 threshold for additional rate taxpayers, meaning more high earners would be dragged into the 45pc tax bracket. However, Ms Rayner is playing with fire with such proposals, the wealth manager warned. Mr Amarante said: 'The concern that wealthy people have is about less wealth acceleration and more about wealth preservation. If a government is trying to tax them unreasonably highly, these people will go somewhere else because they can.' A record 10,800 millionaires left the UK last year amid anger over Labour's tax policies, previous Henley and Partners analysis suggested – more than twice as many as in 2023. Several high-profile names are among the latest émigrés, including Nassef Sawiris, Egypt's richest man and the co-owner of Aston Villa. They also include the most senior Goldman Sachs banker outside the US, Richard Gnodde, and billionaire property tycoon brothers Ian and Richard Livingstone. British nationals are already the second-largest group of buyers of real estate in Dubai, one of the most popular destinations for high-net-worth individuals who leave. The Covid pandemic also prompted greater numbers of wealthy Britons and Americans to seek citizenship in other countries as an 'insurance policy' in case of another pandemic or war, according to Mr Amarante. Mr Amarante said: 'If you had asked me two, three or four years ago, I would have said the majority of our clients are those with less powerful passports. But that is not valid any more. One of our largest source markets is actually the US and the UK now.' He added: 'There is an underlying concern – a bit of life insurance policy thinking – that if we get to another crisis of a global scale, pandemic, war, conflict or something else unforeseeable that at least I have the option to react.' Broaden your horizons with award-winning British journalism. Try The Telegraph free for 1 month with unlimited access to our award-winning website, exclusive app, money-saving offers and more. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
