Are You a High Earner or Executive?
Navigating the High Salary Trap
If you’re earning between £100,000 and £125,140, you’re in one of the UK’s most punitive tax situations. Personal allowance and National Insurance are applied on every pound earned above this rate, creating a hefty tax bill. However, for some, salary sacrifice pension schemes provide not only tax relief but also personal allowance relief. For example, a £10,000 pension contribution for someone earning £110,000 could save over £6,000 in tax and National Insurance, equating to a 60% return before any investment growth. Those with adjusted income over £260,000 are subject to tapered Annual Allowances, with the standard allowance (£60,000 as of 2025/26) reducing by £1 for every £2 of adjusted income over that threshold. This is why it’s important to be mindful and aware of whether you’ve exceeded your allowance, as tax charges can apply when you least expect it, sometimes even years later.
We can help you
- Get on top of your finances to achieve the lifestyle you want to have now and for the future.
- Put the right arrangements in place to look after you and your family should you become ill or die.
- Simplify your various pensions and invest them to achieve your retirement goals.
- Achieve your goals, whether they are to buy your first home, or move to a bigger home for a growing family.
- Start thinking now for your retirement. This may seem distant, but it’s important to understand what you need to do now to achieve the retirement you want.
- Decide what to do with windfalls, such as a bonus payment or inheritance.
- Plan for your children’s future with school fees planning and tax-efficient savings and investments.
What our clients say
Bonuses or Share Options
If you receive performance bonuses, stock options, or Long-Term Incentive Plans (LTIPs), the timing and structure of how you take these payments can dramatically affect your tax position. Spreading bonus payments across tax years, using carry-forward pension allowances, or timing option exercises to manage your tax position requires forward planning. Whether you hold Company Share Option Plans (CSOPs), Save As You Earn (SAYE) schemes, or unapproved options, understanding when to exercise, how gains are taxed, and what happens if you leave employment is essential to maximising their value. We help senior executives with substantial equity stakes manage concentration risk with confidence, lower their risk profile if too much wealth is tied up in employers’ shares, and how to diversify smartly and lawfully.
Building Wealth Beyond Your Salary
High earners often make the mistake of simply accumulating cash because they don’t have time to think about better options. With interest rates fluctuating and inflation eroding purchasing power, holding excessive cash reserves means your wealth isn’t working as hard as it could. ISA allowances of £20,000 are a highly sought-after solution for providing tax-free growth, doubling for couples, which, over time, can accumulate to a substantial pot of money outside traditional tax rules. In addition, General Investment Accounts (GIAs) provide flexible access to your money whilst still benefiting from capital gains tax (CGT) and dividend allowances. Understanding how to use these allowances efficiently, when to realise gains, and how to structure portfolios between spouses can save significant tax, which our financial experts can advise on.
Inheritance Tax Planning for Wealth
Once you’re earning substantially more than you’re spending, wealth accumulates quickly. Before you know it, you’re looking at a potential inheritance tax bill of 40% on everything above £325,000 (or £500,000 if your estate includes your main residence (valued at £175,000 or more) passing to direct descendants, provided the total estate value does not exceed £2 million.)
For couples, this provides up to £1 million of combined allowances, but high earners often find themselves exceeding even these generous thresholds. Gifting strategies, trust arrangements, and pension planning can all play a role in reducing future inheritance tax exposure, though these need to be balanced against your own needs for capital and income.
Strategic Financial Advice for Complex Arrangements
We work with high-earning professionals across Dorset who are navigating the tax complexity, wealth accumulation challenges, and protection needs that come with substantial income. Our Chartered financial planners provide ongoing strategic advice that adapts as your income grows, your circumstances change, and tax legislation evolves.
Whether you need help maximising salary sacrifice opportunities, investing annual bonuses tax-efficiently, or planning inheritance tax strategies as your wealth accumulates, we provide tailored advice that reflects the reality of earning substantial income in the UK.
Our relevant services for high earners and executives:
• Tax Planning – managing high earner tax positions and maximising reliefs
• Pensions – navigating tapered allowances and salary sacrifice strategies
• Investment – building diversified wealth beyond salary accumulation
• Insurance – adequate protection for high-value income streams
Levels, bases and reliefs from taxation may be subject to change.
A pension is a long-term investment not normally accessible until age 55 (57 from April 2028 unless the plan has a protected pension age). The value of your investments (and any income from them) can go down as well as up, which would have an impact on the level of pension benefits available. Your pension income could also be affected by the interest rates at the time you take your benefits.
This content is for information only and does not constitute advice.
The value of your investments can go down as well as up, so you could get back less than you invested.
The Financial Conduct Authority does not regulate estate planning, trusts, or tax advice.
Why work with us?
There are many reasons why over 2,000 people in Dorset, Hampshire and the South have chosen us to help them on their financial journey.
Ready to start your journey?
If you have any questions or would like to organise a no-obligation consultation at our expense, please complete this form.