What is Top 5% Income in UK? (2024)

What is Top 5% Income in UK? (2024)

Want to know the Top 5% Income Uk?

Top 5 percent earners are the most successful and well settled citizens in the society.

The one who earns income above the average salary of the UK comes in the Top 5% earners.

Now a query arises, what does it take to become or come in the Top 5%?

And What is Top 5% Income in the UK?

So don’t worry, today we’re going to spread all the secrets and insightful knowledge in this article behind Top 5% Income & Earners in the United Kingdom (UK).

So without any further delay let’s dive into our most interesting article.

What is the Income of Top 5% Earners in the UK?

According to the data of Office for National Statistics employee earning in the UK,

The average income of the employee who is earning above £82,200 comes in the Top 5% Earners in the UK.

Obviously, the one who is earning above the average salary of £33,280 in the UK is the Top 5% earner.

But the information or income provided above is the pre-tax income that is made up of multiple income sources, whether it’s an employee salary, interest or dividends.

What is the Top 5% Net Worth in the UK

Net worth is the most important criteria to decide whether an individual comes under the Top 5 percent or not.

As saving, investing and passive income sources are the most important factors to become financially independent.

Notably, earning income above £82,200 is not sufficient to come in the top 5%,

With this investing, savings and developing sources that creates passive income is must!

The one who is in the Top 5% is earning an average £82,200 and they develop various passive income sources that make more money for them.

That’s the simple formula for becoming the Top 5% Earner.

According to the Government website, the household must be at least £1,988,500 worth for the Top 5%.

What is £82,200 After Tax Income?

For the calculation of after tax income, we must be aware about the tax rates and allowances of the United Kingdom (UK).

We are assuming the tax rates and personal allowance for £82,200 is £12,570.

The basic tax rates on income above £12,570 to £50,270 salary or income is 20%.

Now calculating the after tax income:

  1. Personal allowance: £12,570
  2. Taxable income: £82,200 – £12,570 = £69,630
  3. Tax on the basic rate (20%): £37,700 * 0.2 = £7,540

Now considering, National Insurance Contributions (NIC):

As the NIC rates varies from the primary threshold of £9,568 and the rates on the income is 12%.

  • NIC on income above the threshold: (£82,200 – £9,568) * 0.12 = £8,601.84
  • Total Deductions:
    • Income Tax + NIC: £7,540 + £8,601.84 = £16,141.84
  • Net Income After Tax:
    • Gross Income – Total Deductions: £82,200 – £16,141.84 = £66,058.16

Ways To Become A Top 5% Earner In The UK

Simply, the goal is to write a budget plan to earn above £82,200 per annum by investing, saving and developing passive income.

Interestingly, you can achieve this goal by writing a budget plan, that’s it!

Now, after creating the budget plan, you need an income source to achieve the goal.

This can be running a YouTube channel, starting a blog or a website that generates clients for you.

Another income source can be an investment banker, fund manager or a private equity professional as the top 1% or 5% build most of their income in these sectors.

Real estate can be another good investment for you to consider as it generates profits as per the geographical location.

Once you become expert in this field then it becomes easier for you to analyse the good investment property that generates passive income for you.

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