What is the £100k income ‘cliff-edge’?

The tax-free personal allowance starts to be taken away when individuals hit a six-figure income in England. This means that people earning over £100,000 will see their tax-free allowance decrease, resulting in higher taxes. Additionally, they will also lose access to childcare subsidies, which can be a significant financial burden for families with young children. This "cliff-edge" effect can have a substantial impact on household finances and may deter some people from pursuing high-paying jobs.

Why it matters

The tax-free personal allowance is taken away when income hits six figures, and childcare subsidies are lost in England. This affects high earners' take-home pay and benefits.

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