Overview
- HMRC projects 2.06 million earners above £100,000 in 2026–27, an increase of 112,000 from April and roughly 6% of the workforce, with totals expected to approach about 2.3 million by 2028–29.
- Chancellor Rachel Reeves has frozen income tax thresholds until 2031, a policy the OBR says will raise around £8bn a year by 2029 as the Treasury seeks roughly £11bn by the end of this Parliament.
- Earnings between £100,000 and £125,140 face an effective marginal rate of about 60%—up to roughly 62% with National Insurance—because the £12,570 personal allowance is tapered away.
- Crossing £100,000 removes entitlement to free childcare hours for households, adding substantial costs for families with young children.
- Advisers point to pension salary sacrifice and gift aid to reduce adjusted net income, but a proposed £2,000 cap on untaxed pension contributions from April 2029 would restrict a key mitigation route.