A record two million workers are set to earn six figures in the new financial year, dragging more people into the £100,000 ‘tax trap’, new figures from Rathbones have revealed.
Figures from a Freedom of Information request show HM Revenue & Customs estimates that 2.06 million taxpayers, around 6% of the UK’s workforce, will earn above £100,000 in the 2026/27 tax year. It marks a 5.7% increase on the current tax year’s estimate of 1.95 million and up from 1.218 million in 2021/22.
In total, Rathbones said the number of taxpayers earning £100,000 is expected to almost double, rising from 1.218 million in 2021/22 to 2.293 million by 2028/29.
The rise comes against a backdrop of a growing tax burden caused by frozen income tax thresholds, which are pulling more earners into higher tax bands, and the loss of key benefits such as childcare support.
Crossing the £100,000 threshold triggers the tapering of the personal allowance, creating an effective marginal tax rate of 60% between £100,000 and £125,140. Meanwhile, parents earning over £100,000 can lose childcare support, worth almost £20,000 for two children under five.
Olly Cheng, senior financial planning director at Rathbones, said: “Earning £100,000 once felt like financial freedom, but today it often comes with a hidden tax sting.
“Frozen thresholds are inflating tax bills, dragging more people into higher bands, while inflation erodes the real value of earnings. This has created a generation of HENRYs – high earners, not rich yet – where those on strong salaries struggle to build wealth because of the double hit of a growing tax burden and the corrosive effect of inflation.”
Cheng said fiscal drag has become one of the most damaging factors affecting the cost of living.
“What was once considered a ‘stealth tax’ is now widely understood and much maligned. By 2028/29, nearly 2.3 million taxpayers are expected to earn above £100,000 – almost half a million more than the estimate for the current tax year – and for families with young children, this will be particularly painful.
“With bonus season approaching, what looks like a reward can quickly turn into a tax shock.”
Rathbones said the number of individuals earning £120,000 or more is also projected to increase by 100,000 to reach 1.4 million in 2026/27, a 7.7% rise from the current tax year’s estimate.
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