You need at least £300k pay to be rich in London

IT takes a salary of more than £300,000 a year to be counted rich in London, an analysis of the country’s fattest pay packets found yesterday.

And to be seen as one of the top earners in his peer group, a middle-aged man in the capital has to make £700,000 a year, it said.

The scale of the salaries, bonuses and perks of the best-paid is ‘staggering’, the respected Institute for Fiscal Studies said, adding that its research showed ‘ the extraordinary scale of the gulf between the merely well off and the very richest’.

The £300,000 figure is the salary needed to be among the top one per cent of income tax payers in London, the IFS said. It is almost twice as high as the £162,000 needed to join the one per cent of highest income tax payers across the rest of the country.

The high pay gap is such that a member of the biggest earning group – a man aged between 45 and 54 – would be in the top one per cent in the country on £162,000, but that pay packet would put him outside the top five per cent in London. To be in the top one per cent in the capital, he would need to make more than £700,000 a year. Researchers at IFS based their study on the self-assessment tax forms demanded by Revenue and Customs from anyone who earns more than £100,000 a year.

Their report said that, nationally, just over 300,000 people make enough to be in the top one per cent, and that they pay more than a quarter of all income tax.

One in three of the highest earners are business owners or partners in large concerns, the report said, and others are City workers such as hedge fund managers. The top group also includes senior accountants and lawyers – one large accountancy business paid its partners on average more than £600,000 last year, and one London law firm pays £100,000 a year even to newly-qualified solicitors. Medical professionals are also among the top one per cent, and the bestpaid include GPs, some of whom are said to earn up to £700,000 a year.

The pay scales dwarf the salary paid to the Prime Minister, who can claim £158,754 a year. Report author Robert Joyce said: ‘The highest-income people are very overrepresented in the country’s south east corner, most of them are men, and many are in their 40s and 50s.’

Women were less likely to be high earners and someone on £100,000 a year can count herself in the top one per cent of high-paid women nationally.