If your earnings are 100K and higher in the UK, you are among a small percent of the highest earners. Of course, any salary is easier to evaluate than the national average income. In this article, you’ll find statistics on salary rates in the UK, income tax influence, and jobs that offer the highest salaries. So, let’s delve into the details and learn how many people earn over 100k in the UK.
Table of Contents
So, how many earners in the UK receive 100K annually? According to government data, only 4% of the population in the country earns 100K per year. So, if you are among them, you are in luck – you make up more than 96% of UK citizens.
The average annual income in the UK is now at £33,282 (or £640 per week). However, the latest 2023 data shows a 7.8% increase in average income, so the number might change soon.
London residents receive higher salaries of £37,000 annually. At the same time, the cost of living in London is also higher.
One of the major factors in household income is age. It is quite understandable that the more experience one has, the higher their salary usually is. Here is the most recent statistic on income distribution according to age:
Another significant factor in salary rates is gender. There is still gender income inequality in the UK, which is unfortunate. Although there has been progress in recent years, the highest earners in the UK are usually men.
The government data on the gender salary gap is as follows:
Based on this data, self-employed and part-time employed female professionals might usually earn more than male professionals. However, it is quite the opposite when it comes to full-time workers.
To earn more than half of the UK population, consider one of the highest-paying jobs. Of course, people making 100K and more didn’t get such salaries from day one. Usually, such income is offered to senior-level positions that require a lot of experience and advanced skills.
Yet, it is interesting to know what job in the UK earns the most and what the most well-paid professions are.
The highest percentile points go to senior executives like Marketing, Sales, and Advertising Directors. IT Directors also earn the most on average. Another well-paid profession is aircraft pilot, followed by traffic controller.
The biggest earners in the UK are:
The figures change based on experience, seniority level, gender, location, and age. The median salary in England is the highest in the UK. The second comes to Scotland, followed by Wales and Northern Ireland.
Earning 100K doesn’t mean you will take all of it home. What is an after-tax income?
The National Income Tax and the National Insurance are two main taxes to consider. The taxable income of 100K gets into the higher brackets. It means that the more money you earn, the more taxes you pay.
Here is how you can calculate the tax and the actual earnings you receive after all deductions.
If you earn 100K per year, your tax-free allowance equals 12,570. You’ll pay 27,432 as Income Tax annually and 6.968 for national insurance. It means that the net income for your financial year will equal about 65,600. It is the sum you will receive in your bank account.
As a percentage, the net pay amounts to 65.6%, income tax is 27.4%, and national insurance is 7%.
Whether you are interested in self-employment or want to become a C-level executive in an international company, several factors might come in handy to increase your average earnings.
Besides gender, location, and profession, the salary rates are influenced by:
A person can hardly control some of these factors, like the cost of living or governmental policies. Others, like the education and employment sectors, are in your control.
How much a person in the UK earns depends on the level of education. Generally, the same rule applies to other countries as well. It is one of the main benefits of professional education – it opens new opportunities for people.
According to the GSCE attainment and lifetime earnings report 2021, only one grade improvement in GCSE is associated with an 8,500 increase in lifetime salary.
A one-standard-deviation improvement leads to an increase in discounted lifetime earnings by 96,000.
Undiscounted earnings for one additional grade is about 23,000. For female students, it is about 20,000; for male students, it is about 24,000. Unfortunately, the gender inequality remains present.
Another critical point in this survey is the subject. For example, one plus grade in Math will bring you about 14,500 in discounted returns. But one grade in English will only get 7,300. For Music, the return is even lower and amounts to only 5,500.
Experience is one of the main factors contributing to household income. Human capital is a driving force for any economy. Undoubtedly, a senior-level expert receives more money than a beginner in any industry.
It is worth noting that experience can be a more significant factor in professions without high credentialing barriers. It is evident compared to positions that do require such barriers (for example, a specific degree is needed to be a Doctor).
Evolving household income trends in the UK suggest that the average salary increases annually. Between 2020 and 2023, the median household disposable income grew by 0.7%. For London, the number is higher. Although the trend for households is positive, it is hard to call this percentage significant.
It is essential to acknowledge the impact of economic shifts on income levels. Inflation and global economic instability contribute to the cost of living, incomes, and unemployment rates.
The global economy hasn’t recovered fully after the COVID-19 pandemic before hitting what many call a recession. A salary is not enough to determine whether the wages are livable. One must consider property prices, transportation, taxed income, and food prices.
However, if you are 4% of 100K earners, you can live comfortably in London or any other part of the UK.
