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Higher earners worry more about money than those earning the average salary, according to a new survey. Four in five of those earning £100,000 say that their financial situation has a direct impact on their mental wellbeing, according to research by Revolut. It is higher than the 75 per cent reported by those earning the average salary, between £35,001 and £45,000.
These so-called ‘HENRYs’ – which stands for high earners not rich yet – say they are left with little at the end of the month after bills, taxes, higher mortgage rates and lifestyle inflation . While individuals earning £100,000 or more a year are in the top 4 per cent of earners, tax deductions mean they report that they do not feel wealthy.
The personal allowance starts to be removed at £100,000, which has created an effective income tax rate of 60 per cent for six-figure earners, until they earn £125,140, at which point the marginal tax rate falls to 45 per cent. Individuals who have not paid off their student loan debt will have to pay a rate of 9 per cent, and 6 per cent for postgraduates.
Frozen tax thresholds mean that as wages grow, more people are brought into this tax trap and lose out on more of their income. A report by the IFS found that by the 2027/28 tax year 8.9million taxpayers will pay higher rate taxes, compared to 7.4million now and 3.2million when the Conservatives came to power in 2010.
Revolut said that over a quarter of individuals don’t prioritise financial wellbeing, despite its impact, with a notable generational divide forming.
A third of Britons spend little to no time on planning or saving, which rises to 45 per cent among Gen X. Gen Z spend nearly half the year – around 168 days – feeling stressed about money, with millennials closely behind at 156 days.
Men are also losing the equivalent of four months each year to financial stress, while women are closer to five. Tara Massoudi, general manager of premium products at Revolut said: ‘When we talk about wellness, financial health is often missing from the picture.
‘But as our research shows, money worries weigh heavily on people’s mental wellbeing – often as much as diet, exercise or sleep.’
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