When I started working in the early ‘90s, earning £100,000 a year meant you’d made it. Proper money. The kind that freed you from Ryanair, and meant someone else would do your ironing and fold your towels into origami swans.
Then tax, inflation and friends doing better than you happened.
I’ve always worked, and mostly lived, in London, where £100,000 is Monopoly money. It sounds impressive until you realise, you’re still sleeping on Ikea furniture, your “en suite” is a corner sink in your bedroom, and the shower has a curtain that clings like a needy kitten. Fancy buying your own home on a £100,000 salary? Good luck. In Zone 3, a modest two-bed with “character” (translation: damp, possibly haunted) will set you back £600,000. That’s before stamp duty, solicitor’s fees, and your builder tutting at the quality of the wiring.
Payslips are a fantasy, since HMRC extract so much — earn more than £100,000 and your personal allowance vanishes faster than a prime minister’s integrity at PMQs. Between £100,000 and £125,140, you’re in effect taxed at 60 per cent for that portion of your income. A rate so steep it should come with crampons and a sherpa.
For some, earning a six-figure salary makes you rich. Rich enough, according to the government, to be stripped of benefits and allowances. No tax-free childcare, no help with nursery fees (together, worth thousands), no universal anything. If you earn six figures you can jolly well pay full price for everything.
Perhaps you’re thinking: “Boo-hoo, poor £100,000-earner. Let’s start a GoFundMe for your Waitrose essentials”. But I maintain a £100,000 salary in London is comfortable at best. It’s still eating packed lunches money.
So then how rich is rich?
According to HMRC, in the 2023/24 tax year, 850,000 individuals, about 2 per cent of taxpayers, met their definition of “wealthy”. Of these 395,000 had annual incomes exceeding £200,000, while 455,000 owned assets worth more than £2mn. Those with assets between £2mn and £10mn are officially considered “affluent”.
Are you rich if you earn £200,000 a year? Well, you can certainly breathe a lot easier. You might even send your child to a school where the curriculum includes Latin — but the costs could still be pretty damaging, thanks to the VAT on school fees and the occasional “contribution” you have to make to the school roof fund.
Perhaps you’ve moved to a leafy suburb, where your mortgage has more zeroes than the number of unread emails in your inbox. You might have a boot room, a dog called Bramley, and a wine fridge (albeit a small one). You might even start to believe you’re doing well; until you bump into a former employee who tells you they now own a 400-acre farm and a ski chalet in Gstaad.
What about £500,000? Surely, now you’re rich? Yes, in most of the country, you’d be regarded as landed gentry and asked to open village fêtes. But in London, you’re just another person Googling “Can I install a basement pool in a conservation area?” You might finally be able to buy a townhouse with off-street parking, hire a live-in housekeeper, and own an Aston for the weekend.
Yet the tax system punishes you. You’re paying over £200k annually to HMRC. The marginal tax rates still bite. Your perks have evaporated. The school fees keep climbing, the cleaner wants a pay rise, that last holiday drained the bank account because you insisted on turning left and the council charges you extra because your modest house at the coast with dodgy WiFi counts as a second home.
Despite earning a wedge, you still don’t have the trappings of what most people would really consider rich. You’re not installing mature olive trees in your newly landscaped garden. You don’t own a wine cellar with temperature-controlled zones or a dressing room with bespoke furniture, Lutron lighting and a Sonos system that’s co-ordinated throughout the house. Nor the designer kitchen stuffed with Gaggenau kit, or the driver, helipad or sixteen-car garage.
Because rich. Proper, actual rich these days is building your own spaceship. Hosting a wedding so opulent your guests are flown in on separate Gulfstreams to avoid awkward small talk. It’s not just owning a boat, but a crewed yacht, with a support vessel for the toys. And the island you keep them on. It’s buying a watch costing more than the GDP of Andorra. Or simply opening a bottle of Krug because it’s lunchtime.
Yet our tax system sees no difference between you, still battling rising council tax bills and Mr Space Cowboy Bezos. Earn £125,141? You’re in the same bracket as the bloke who bought a place in Monaco because they fancied a new postcode. Worse, if you’re part of this supposedly rich class, you’re fair game. Tax your pension! Scrap your allowances! Next, they’ll make you pay for the NHS with a contactless tap.
So, how rich is rich? If you’re asking, you probably aren’t. Rich, conveniently, is always someone else. Well almost always: I’ve been writing Rich People’s Problems for eight years, and while I’ve never once thought of myself as genuinely rich, in all that time only one person has ever admitted to me that they were — and I was on their yacht when they said it.
Earning £100,000 or even £500,000 doesn’t make you rich. If recent years are anything to go by, it makes you a target. A walking wallet with a pulse.
Rich is a relative concept, usually based on assets not income. But if the government keeps this up, one thing’s for certain: we’ll all be poor.
James Max is a broadcaster on TV and radio and a property expert. The views expressed are personal. X, Instagram & Threads @thejamesmax