High-earning professionals earning just over £100,000 — often dubbed “Henrys” (High Earners, Not Rich Yet) — could be among the hardest hit in next month’s Budget, with analysts warning their effective tax rate could rise beyond the already punitive 60% threshold.
Typically consisting of mid-career professionals and dual-income households with limited accumulated wealth or assets, Henrys are often caught in what experts call the UK’s “stealth tax trap”. This group is already disproportionately affected by frozen tax thresholds, reductions in childcare support and penal cuts to personal allowances once income exceeds £100,000.
Under current rules, workers earning between £100,000 and £125,140 lose £1 of their £12,570 personal allowance for every £2 earned above the £100,000 threshold, creating a marginal tax rate of roughly 60%.
Hargreaves Lansdown notes that many Henrys also lose access to government-funded childcare once their income crosses £100,000 — adding thousands of pounds to annual household costs that lower earners do not incur.
With wage inflation continuing, analysts warn that an extension of the existing income tax threshold freeze — widely expected to feature in Rachel Reeves’ November Budget — will drag more professionals into this high-tax band.
The number of taxpayers paying the additional rate of 45% on income over £125,140 has more than doubled since 2022, highlighting how fiscal drag is reshaping the tax landscape for upper-middle earners.
Pension relief and property reforms could deal further blows
While many Henrys currently mitigate tax exposure by making salary sacrifice contributions into pension schemes, proposals to introduce a flat 20% rate of pension tax relief could dramatically reduce the effectiveness of this strategy for higher-rate taxpayers.
Such a reform could raise billions for the Treasury by cutting back generous reliefs for earners paying 40% or 45% tax — many of whom fall into the Henry category.
Potential changes to council tax could add further strain. Ministers are exploring reforms to ensure pricier homes pay more, with suggestions ranging from new higher tax bands to premium surcharges on high-value properties.
Sarah Coles, head of personal finance at Hargreaves Lansdown, said: “Henrys would be in the frame for even higher tax bills if reforms to council tax are introduced, especially in London and large cities where property values are higher.”
She warned that proposals once considered by George Osborne — including additional bands for expensive properties — may re-emerge under Labour’s revenue plans.
The Chancellor is expected to target individuals with the “broadest shoulders” to meet her fiscal rules amid weak growth forecasts and higher borrowing costs. Analysts say this could leave Henrys exposed to further income tax measures, limited reliefs and higher local taxation — despite not being traditionally wealthy.
With the cost of living still elevated and childcare, housing and pension pressures weighing heavily on this income group, tax planning is expected to rise up the agenda for professionals in the £100,000–£150,000 bracket as Budget day approaches.
