When you’re in the top 1 percent income uk, it usually means that you’ve had a stonking year – either through pay rises or perhaps a one-off bonus. But it’s not easy to stay in this elite club. Jobs go, companies fold, and recessions wreak havoc on earnings. In fact, many of the people in the top 1% won’t be there this time next year.
But the story doesn’t stop there. Our research shows that even high earners often have a misguided view of the wider society around them. For instance, they think that state social spending is higher than it actually is, and that poorer families rely on government support more than they do. They also have the illusion that their own taxes are low, and they forget just how much of their income is taxable.
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So, if you want to break into this exclusive club, how do you make it? Well, the key is to craft a career or business that gives you a shot at this, then use effective financial planning and embed good financial habits. In the long term, you’ll have built a fund of wealth that allows you to improve your lifestyle every year and leave a legacy for your children.
In the meantime, you’ll need to understand how to diversify your income streams and reduce your tax burden. The best way to do this is by supplementing your salary with income from partnerships and dividends, which are taxed more favourably than PAYE.