Daily Politics from the New Statesman £100k salary, feeling poor – is tax killing ambition?
Feb 13, 2026
A listener earning over £100k warns of a 'tax trap' that creates 67% marginal rates and lost childcare support. The discussion covers ways to blunt the threshold hit like pensions and salary sacrifice. They also debate student loan forgiveness, public polling and political fallout. Finally, they unpack MPs earning extra income, media loopholes and rules letting politicians present shows.
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Sharp Tax Penalty At £100k Threshold
- The UK tax system creates a sharp penalty around the £100,000 threshold because the personal allowance is withdrawn and free childcare disappears.
- That creates effective marginal rates up to 67% and can make people worse off earning slightly more than £100,000.
Use Pension And Salary-Sacrifice To Reduce Tax
- Consider tax-efficient steps if you're near the £100,000 threshold such as increasing pension contributions or charitable donations.
- Use salary sacrifice and pension schemes to reduce taxable income and avoid the childcare cliff.
Frozen Thresholds Act As A 'Stealth' Tax
- Freezing tax thresholds since 2021 has acted as a stealth tax by pushing more people into higher bands.
- By 2030 nearly a quarter of people will be in the higher-rate bracket, changing who feels taxed and altering political behaviour.