TaxCliff
Between £60k and £125k, earning more can leave your family with less. Put in your numbers and see the exact pension salary sacrifice that beats the trap.
About you
Your household
Which student loan plan am I on?
It depends on where you lived when you took the loan out, and when your course started:
- Northern Ireland — always Plan 1, whatever the year.
- Scotland — always Plan 4 (loans applied for through SAAS).
- England — Plan 1 before Sept 2012, Plan 2 from 2012 to July 2023, Plan 5 from Aug 2023.
- Wales — Plan 1 before Sept 2012, Plan 2 after (Wales doesn't use Plan 5).
- Postgraduate loan — English or Welsh master's/doctoral loans only; it repays alongside your main plan. Scottish and NI postgrad loans repay through Plan 4 / Plan 1 instead.
Still unsure? Your repayment plan is shown when you sign in to your student loan account on gov.uk.
The fix
Sacrifice £10,000 into your pension
That clears the trap and leaves you £4,200 a year better off in cash and benefits — plus £10,000 in your pension. You get paid to save. On the payslip that's about £317 a month less take-home, with £833 a month landing in your pension — the childcare support and child benefit come back separately.
Kept value = take-home pay + child benefit kept + childcare support with no pension contribution, for your household in England, 2026/27 tax year. Contributing moves you left; salary sacrifice lands exactly on the curve, net-pay and relief-at-source land slightly off it (NI and student loans don't fall).
| Per year | No pension |
|---|---|
| Take-home pay | £72,357 |
| ≈ per month | £6,030 |
| Income tax | £33,432 £2,786/mo |
| Employee NI | £4,211 £351/mo |
| Child benefit kept | £0 |
| Childcare support | £0 |
| Total kept value | £72,357 |
Understand your trap
- The 60% tax trap: why £100k–£125k is the worst place to earn
Between £100,000 and £125,140 the personal allowance taper pushes your real marginal rate to 62% — or 69.5% in Scotland. Here's the mechanics and the fix.
- The £100k childcare cliff: how £1 of pay can cost you £8,000
Earn £100,001 and you lose free childcare hours and Tax-Free Childcare in full — a hard cliff, not a taper. What it costs a parent of two and the exact fix.
- Keep your child benefit: beating the £60k–£80k charge
The High Income Child Benefit Charge claws back 1% of your child benefit per £200 over £60,000. What it's worth, who's tested, and how salary sacrifice keeps it.
- Bonus sacrifice: turn a 62%-taxed bonus into pension at full value
A bonus that lands in the £100k–£125k zone keeps you 38p in the pound — or less with children. Exchanging it into your pension before payday keeps 100p.
- Student loans and the tax traps: the 51%–71% graduate rates
Plan 1, 2, 4, 5 and postgraduate loans add 6–15% to your marginal rate — and they stack with the child benefit charge and the 60% taper. The 2026/27 thresholds and what actually reduces them.
- Scotland's £100k trap: 69.5% marginal tax, but no childcare cliff
Scottish taxpayers face a harsher personal allowance taper — 67.5% plus NI — but Scotland's universal funded hours mean the £100k childcare cliff is much shallower. The 2026/27 bands and what changes.
2026/27 tax year, childcare with registered providers. Your nation sets the income tax bands (Scotland's six-band schedule vs rUK) and the childcare rules: England and Wales lose free hours over £100k, Scotland's funded hours are universal, Northern Ireland has Tax-Free Childcare only. Child benefit is charged on the household's higher earner, and childcare support needs both parents under £100k. This is a modelling tool, not financial advice — check your own position with HMRC or an adviser.