Analysis from IG indicates that a growing number of NHS staff, teachers, military personnel and police officers could be affected by the £100,000 personal allowance taper over the coming years, bringing tax and planning considerations into sharper focus.
A growing number of senior public sector professionals could find themselves affected by the £100,000 personal allowance taper over the next four years, according to analysis from IG.
Using published public sector pay scales, the analysis identifies a range of roles where routine salary progression could see earnings move above the £100,000 threshold by the end of the decade.
Among those highlighted are NHS consultants, senior nurses, head teachers, military officers, senior civil servants and police chief superintendents.
Under current rules, individuals lose £1 of their personal allowance for every £2 earned above £100,000. As a result, earnings between £100,000 and £125,140 can be subject to an effective marginal income tax rate of 60%.
According to IG’s projections, newly appointed NHS hospital consultants, military nurses at Lieutenant Colonel rank and certain military chaplains could cross the threshold as early as 2027-28.
Head teachers of large secondary schools and senior civil service directors are projected to follow in 2028-29, with police chief superintendents affected from 2029-30.
The analysis also highlights the role pension contributions can play in determining whether an individual is caught by the threshold. While some professionals may earn salaries above £100,000, employee pension contributions can reduce the income figure used when assessing whether the personal allowance taper applies.
IG notes that the position can vary between professions. For example, NHS consultants can remain below the threshold after pension contributions, while members of non-contributory pension schemes may not benefit from the same reduction in assessable income.
Beyond income tax, the £100,000 threshold can also affect eligibility for childcare support. Parents whose adjusted net income exceeds £100,000 can lose access to additional government-funded childcare hours.
Research previously conducted by IG found that among workers earning between £90,000 and £125,000 with nursery-age children, 92% said tax and financial pressures prevented them from investing enough to build future wealth, while 54% said they would invest more if crossing the threshold did not result in the loss of childcare support.
Michael Healy, CEO of IG Consumer, said: “The £100,000 tax trap is no longer just a problem for the highest earners. It’s increasingly catching the very people we rely on to run our hospitals, schools and public services.”
He added: “Doctors, head teachers and military officers shouldn’t find themselves facing a 60% marginal income tax rate simply because they’ve worked their way up the career ladder. Yet that’s exactly what our outdated tax system is doing.”
The analysis comes as frozen tax thresholds continue to bring more workers into higher tax bands. The findings highlight the potential importance of monitoring adjusted net income, pension contributions and wider tax implications for clients approaching the £100,000 threshold.
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