Business owner Graham Robinson earns £100,000 a year and classifies as a higher earner – yet still has no money left at the end of the month after paying bills.
The 45-year-old lives in Timperley, Greater Manchester, with Kian, his nine-year-old son, most of the week, having separated from his former partner.
As a teenager, Graham dreamt of earning a six-figure salary. He knew from the age of 16 that he wanted to become an accountant to earn decent money.
From the ages of 16 to 39, Graham was an accountant at the same security firm, earning a six-figure salary by the end. In 2019, he quit to create his own business and became the managing director of Keysim, which sells specialist SIM cards to businesses.
Graham told The i Paper: “All my annual income comes from Keysim. Via a mix of salary and dividends, my annual income is about £100,000 a year. Gross, that’s about £8,300 a month. Having this income isn’t the dream I’d imagine it would be.”
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The father-of-one has some hefty monthly outgoings to contend with. The monthly mortgage repayment on his small detached house is £1,300, up from £850 a few years ago. He purchased the property in 2009 for £174,000 and is on a five-year mortgage deal with an interest rate of 5 per cent.
Graham is also paying off several loans and credit card debts, with repayments totalling £900 a month. On top of that, his home utility bills are around £350 a month, about £100 higher than a year ago.
Graham spends £400 a month on groceries, which is about £150 more each month than a year ago.
The business owner also spends £400 a month on trips to McDonald’s. He says: “My son has autism and one of his favourite things to do is spend time at a McDonald’s drive-through. We go there a lot and the bills add up”.
Graham’s son also enjoys car trips to Wales whenever possible. Graham says: “Kian finds car trips soothing, and we take a few long trips each week, usually to Wales. As a result, I can easily spend £500 to £600 a month on petrol.”
When he was younger, Graham viewed a £100,000-plus salary as “life-changing”. Now, however, he is not convinced that earning this amount makes someone wealthy.
He said: “At the end of the month, I have absolutely nothing left over and reach the top of my overdraft limit. I’m a single-income household and though I earn a six-figure sum, I don’t have disposable income to play with at the end of the month.”
Meanwhile, Graham drives an 18-year-old Audi and explained: “It was an insurance write-off, but I wanted a cheap car which I could pay for outright. I have no desire to buy a plusher car on finance.”
While Graham’s income means, as he puts it, he “doesn’t have to sweat the small stuff”, bigger-ticket purchases require caution.
He says: “I’m not in a position to put a load of cash into buying a new, bigger home, even if I wanted to. Buying a new property would push my finances too much.”
The crux of the issue for Graham is tax. He says: “After tax, my monthly income is around £5,400 a month. And the tax thresholds haven’t been changed for years, which is problematic. There is no incentive for me to earn more, particularly if higher pay tipped me into the 60 per cent tax trap.”
Graham adds: “I don’t live in massive luxury. In my opinion, to be well-off, you’d need to be taking home £7,500 a month. At my level, it’s still a balancing act. I still have to choose what I can and can’t do.”
He has no money in pensions and is banking on his limited company to get him through retirement.
He says: “I don’t have a bean tied up in pensions. There’s no Plan B.”
“I’m worse off since Labour got into power. Tax is at the heart of the problem.”
Will Lenehan, a director at Life Plan Partners, says: “Earning £100,000-plus might sound comfortable, but it’s actually where some of the system’s biggest pressure points begin.
“Between £100,000 and £125,140, people lose their personal allowance, creating an effective tax rate of around 60 per cent. At the same time, many families also lose access to childcare support, which can add thousands in extra costs.”
He added: “The combination means higher earnings don’t always translate into higher take-home pay. In some cases, people are turning down or limiting their income to avoid crossing key thresholds.
“The real issue is these sharp ‘cliff edges’, which can discourage progression rather than reward it.”