"They Don’t Want Us To Have a Bigger Pool Than Kanye"
Why £100K Isn’t What It Used To Be
DJ Khaled once said:
“They don’t want us to have a bigger pool than Kanye.”
The “they” is never clearly defined.
It’s just some invisible force working against you.
And sometimes, when you look at the UK tax system…
it can feel like “they” might be the government.
Because earning £100,000 today does not feel the way many people expected.
You work hard.
You climb the career ladder.
You finally reach six figures.
And yet somehow…
it can still feel like you are not getting ahead.
Welcome to the world of the H.E.N.R.Y.
High Earner. Not Rich Yet.
In many ways, this is a stage of life I understand very well.
The Reality of Being a HENRY
A HENRY is typically someone earning around £100k or more, but who has not yet built meaningful wealth.
And in the UK, there are more HENRYs than ever before.
Not because people suddenly became rich.
But because the financial landscape has changed.
Many high earners today are navigating:
• Large mortgage payments 🏠
• Expensive childcare 👶
• Student loan repayments 🎓
• Rising living costs 📈
• Frozen tax thresholds
• Higher tax rates
You can be earning more than 95% of the country and still feel like wealth is taking time to build.
For many people, this is simply the most expensive stage of life.
As the saying goes:
“This too shall pass.”
Though when the nursery bill arrives, it doesn’t always feel that way.
The £100K Tax Trap
One of the more unusual parts of the UK tax system is what’s often called the £100k tax trap.
Normally, everyone receives a £12,570 personal allowance, meaning that portion of income is tax-free.
But once your income exceeds £100,000, that allowance starts to disappear.
For every £2 you earn above £100k, you lose £1 of your tax-free allowance.
By the time your income reaches £125,140, the entire allowance has been removed.
The result is an effective tax rate of around 60% on income earned within that range.
In practical terms, for every additional £1 earned between £100k and £125k, you may keep only about 40p.
Why This Trap Is Worse Than It Looks
The £100k tax trap was introduced in April 2010, when the government decided that people earning above £100,000 would gradually lose their personal allowance.
At the time, the policy was presented as a way to make the tax system more progressive. The government was increasing the personal allowance for lower earners, while higher earners would gradually lose theirs.
But here is the key detail.
The £100,000 threshold has never been increased since it was introduced.
If it had simply kept pace with inflation since 2010, the equivalent level today would likely be closer to £145,000.
Instead, the taper still begins at £100,000.
Which means a policy originally designed to target the very highest earners now affects a much broader group of professionals.
And to make matters worse, income tax thresholds are currently frozen until 2031.
Which means more people will gradually drift into higher tax bands over time, even if their real purchasing power hasn’t meaningfully increased.
Economists call this fiscal drag.
Most people, myself included, would probably call it something else entirely.
Ouch.
What HENRYs Can Actually Do
If you are a HENRY, earning more money alone is not enough.
What really matters is how efficiently you structure your finances.
Here are a few principles that can make a real difference.
1️⃣ Use Tax Efficiency Wherever Possible
Once you reach higher tax bands, tax efficiency becomes essential.
Structures like:
• Pensions 🏦
• ISAs 📊
• Salary sacrifice
can dramatically improve long term outcomes.
For example, pension contributions can reduce taxable income, which may help you recover lost personal allowance and potentially avoid the 60 percent tax trap.
Salary sacrifice can also reduce taxable income through things like:
• Electric vehicle schemes 🚗
• Workplace benefits
For higher earners, these structures can make a meaningful difference over time.
2️⃣ Avoid High Interest Debt
High earners are often targeted with expensive credit products:
• Car finance 🚘
• Credit cards 💳
• Buy now pay later schemes
But if you are paying 15 to 25 percent interest, building wealth becomes extremely difficult.
Before focusing on investing, eliminating high interest debt is often the highest return decision available.
3️⃣ Invest for the Long Run
Many HENRYs delay investing because life feels expensive.
But time is one of the most powerful forces in wealth creation.
Consistent investing over long periods allows compound growth 📈 to do the heavy lifting.
Even modest contributions can grow significantly over decades.
4️⃣ Diversify Your Portfolio
In finance we often say:
“Diversification is the only free lunch.”
Many people in the UK already have a large portion of their wealth concentrated in one asset, their home 🏠.
If your mortgage represents a large share of your financial life, it becomes even more important to diversify elsewhere.
That could include exposure to:
• Equities (stocks) 📊
• Bonds
• Commodities
etc..
The goal is not to rely on a single asset to build your financial future.
The Bigger Picture
Being a HENRY can sometimes feel frustrating.
You earn well.
But taxes, costs and responsibilities mean wealth does not always accumulate as quickly as expected.
The good news is that this stage of life is often temporary.
Childcare costs eventually fall.
Mortgages get paid down.
Careers continue to progress.
The key is making sure that during this phase you are quietly building the foundations of long-term wealth, even if it doesn’t always feel that way.