Ndubuisi 'Andy' EgwimMoney Coach for Medics|Ex-NHS GP|21+ Yrs Investor| Founder, MoneyWiseDoctor.com|Helping Medics Avoid Big Money Mistakes

Doctors Lose 60% of Income to UK Tax Trap

24 Jun 2026 · 1 min

Watch on YouTube

1:01

In this segment, Ndubuisi 'Andy' Egwim explains the UK’s “60% tax trap” that affects earners with adjusted net income above £100,000. He details how the personal allowance (£12,570) is withdrawn at a rate of £1 for every £2 earned over £100k, causing the effective marginal tax rate to reach about 60% once income hits £125,140. Using a GP earning roughly £118k as an example, Andy shows why many doctors feel they are working harder without seeing proportional financial benefit. He then highlights pension contributions as a strategy to lower adjusted net income and escape the trap, contrasting this with using an ISA for the same £20,000 investment, and argues that the tax‑efficient “wrap‑out” of a pension can dramatically improve net outcomes.

Chapters

was earning around £118K in adjusted net income, which means she was sitting squarely into one of the most painful tax of the UK system, the 60% tax trap. Now you already know this if you've been following my channel, that if your adjusted net income crosses £100K, you start to lose your personal allowance. And for every £2 you earn above £100,000, you lose £1 of your tax-free allowance, of your £12,570 tax-free allowance. And the result is that part of your income can effectively be taxed at 60% because by the time you hit £125,140, you've lost all the tax-free allowance. This is why Some doctors work harder, do extra sessions, then wonder why they don't feel much better off. The money is leaking before they ever get the chance to even touch it or invest it. Now, here's where that becomes interesting. Pension contributions can actually help to reduce your adjusted net income and bring you out of the 60% tax trap. And if this GP had explored a pension contribution before using the ISA, the outcome might have looked very different. Same £20,000, same discipline, potentially the same investment, but different wrap-out, different outcome.