# The £100,000 threshold can cut tax efficiency and childcare support

- URL: https://talkfuse.com/story/what-is-the-100k-income-cliff-edge/
- Published: 2026-10-25T12:00:03+00:00
- Updated: 2026-10-25T12:22:32+00:00
- Original publisher: The Guardian (publisher lean: Left)
- Original article: https://www.theguardian.com/money/2026/oct/25/100k-salary-income-cliff-edge-tax-personal-allowance-children
- Topics: Art, Business, Celebrity, Culture, Entertainment, Markets, UK, World

## Key points

- The personal allowance tapers away above £100,000.
- Some earnings up to £125,140 face an effective 60% tax rate.
- In England, childcare and child benefit losses can total about £30,000.

## Summary

Earning over £100,000 can trigger a sharp loss of income and family support. The personal allowance is withdrawn above that threshold, creating an effective 60% income tax rate on earnings up to £125,140; in England, some childcare support also stops once a parent’s adjusted net income exceeds £100,000.

For every £2 earned above £100,000, £1 of the £12,570 allowance is lost, and with National Insurance included, workers keep about £38 of each extra £100 in that band. An estimated 800,000 people face this tax effect. For a family with a nine-month-old and a two-year-old, losing tax-free childcare, funded hours and child benefit can mean roughly £30,000 less support; estimates of children missing funded childcare rose to 50,500–99,000 in 2025-26, up from 15,600–30,800 two years earlier.

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Summarised by TalkFuse (https://talkfuse.com/). Quote the original publisher for the reporting and link this page for the summary and discussion.