7 hours ago
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.
