£100,000 earners up by half

Patrick Sawyer12 April 2012

THE NUMBER of people earning six-figure incomes has gone up by almost half in the past four years. Inland Revenue figures show there are about 326,000 people in Britain who will earn £100,000 before tax this year, a rise from 222,000 in 1998-99.

Combined with statistics revealing a continued rise in property prices, the figures show that more people, overwhelmingly in and around London, are reaping the benefits of Britain's booming economy.

The move away from collective pay deals has opened the door to individual contracts and pay increases based on performance or skill, allowing those in key professions to demand ever higher rewards.

John Philpott, chief economist of the Chartered Institute of Personnel and Development, said: 'Global communications and international trade mean that the potential market for someone's particular skill is greater, and people have the opportunity to exploit the competition for their talentsin different parts of the world.'

About 45% of those earning £50,000 a year or more - some 471,000 people - live in London and the South East, with a mere 61,000 in Scotland and 19,000 in the North-East.

The figures, which show the total number of taxpayers has risen from 26.9m to 28.3m, suggest Labour's attempt to narrow the gap between the haves and have-nots has had a limited effect. The party's tax and benefit changes since 1997 have given more money to people on low incomes through tax credits while higher earners have lost tax allowances and been hit with national insurance increases.

This week, City experts said a rise in London house prices is likely to trigger a further acceleration in the property boom, with annual increases topping 20%.

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