There has been a sharp uptick in people classed as ultra high earners, analysis of taxman data shows.
Around 31,000 taxpayers in all age groups had annual earnings of £1million or more in the 2024/25 tax year, against 29,600 the previous year.
Together, these ‘ultra-high earners’ had a combined income of £89.1billion, an increase of £5.2billion on 2023/24, the analysis of official figures from Lubbock Fine Wealth Management reveals.
That suggests a typical take home income of these 31,000 higher earners of nearly £2.9million each.
The number of millionaires aged 30 or under has reached a new record high of 1,000, data shows.
The number of young taxpayers in Britain earning at least £1million a year increased by 11 per cent to 1,000 in the 2024/25 tax year, up from 900 the previous year, which itself was a record.
In the money: The number of millionaires aged 30 or under has reached a new record high of 1,000, data shows
Someone earning £1million a year will typically pay more than £400,000 in tax per annum, though this assumes zero pension contributions or other forms of tax relief.
Anyone with an income of £2.5million a year can expect, without employing tax relief measures, to take home £1,336,786.35, with £52,010.60 being forked out for national insurance.
About £1,068,687 would be gobbled up by the 45 per cent income tax rate.
Someone earning £5million a year would take home around £2,661,786.35, with £102,010.60 shelled out for national insurance.
Again, this assumes no tax relief measures, such as pension contributions have been used. With a 10 per cent a month pension contribution, or £500,000 for the year, the total take home pay level would reach £2,386,786.35.
No personal allowance applies to incomes at this level.
Meanwhile, someone raking in £500,000 per year will, assuming no tax relief measures have been taken, take home £276,786.32, according to HM Revenue & Customs.
An individual earning £250,000 a year gross can expect to see their take home pay drop to around £144,286.35, on the basis no tax relief kicks in.
Beyond the six-figure pay packet, someone earning £50,000 a year gross will pay around £7,484.20 in income tax and £2,994.40 in national insurance annually.
Andrew Tricker, Lubbock Fine’s managing director, said many younger people earning super-sized incomes were working in ‘volatile’ industries, such as sports, entertainment and social media content creation.
Lubbock Fine said that between them, young taxpayers earning £1million or more a year had a combined income of more than £3billion, an increase of 5.9 per cent on the previous year.
Back in 2020/21, around 800 people under 30 had £1million-plus incomes. Together, they had total taxable earnings of £2.6billion.
Lubbock Fine said the rise in the number of wealthy young taxpayers was down to a combination of larger deals for sports, music and media stars, higher salaries in technology and financial services, and increased social media advertising spending boosting the incomes of influencers.
Advertiser spending on social media surged between 2019 and 2024 to £917million and is forecast to exceed £1billion this year, Lubbock Fine said.
That is more than is spent on cinema, radio, or magazine advertising in Britain, the analysis added.
While earning millions-of-pounds a year is something most people aged 30 or under can only dream of, Tricker warns it can come with a drawback.
Unless young high earners save a large percentage of their income while they are still young, ‘they may see sudden drop in their standard of living as they move towards their forties’, Tricker said.
Russell Rich, a partner and head of sports and entertainment at Lubbock Fine, said: ‘Footballers, boxers, sports people tend to live beyond their means when they retire, which means they build up problems very quickly.
‘People in the arts, also do not tend to be good at saving and investing the money that they make.
‘If you look at footballers, they have five to seven years where their earnings peak.
‘With social media stars, the longevity of their careers is uncertain. Young people need to save early and as much as they can.’
Tricker said that while certain Premier League football clubs may provide some financial education to their young academy players, those players will often lose access to that financial advice when they move or retire.
Other industries, like the music industry or social media, provide even less formal access to financial advice than the football industry, Tricker added.
Footballers and other sports stars’ peak earning years tend to come in their late 20s and then suddenly decline when they stop competing, which Tricker said makes saving and planning from a young age a necessity.
According to the analysis, financial literacy in Britain remains ‘significantly low’ compared to other countries.
Just under a third of the population is financially literate, compared to 49.8 per cent in Canada and 55.6 per cent in Hong Kong.
According to Lubbock Fine’s analysis, 39 per cent of adults in Britain, or around 20.3million people, do not feel confident managing money.
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