Who’s Really Wealthy in the UK? A 2025 Look at Income, Assets and Expectations

In 2025, many in the UK are asking a deceptively simple question: what does it really mean to be wealthy? According to a new report from HSBC UK, the average Briton believes you need to earn £213,000 a year to count as wealthy — a figure that far exceeds the national average salary. Even those earning over £100,000, placing them comfortably in the top 4% of UK taxpayers, often don’t feel they’ve arrived financially. One in ten of these high earners actually believe “true” wealth begins at £724,000 a year.

These eye-catching numbers reveal something deeper: a growing disconnect between income, lived financial experience, and perceptions of wealth. And they highlight why income alone is no longer — if it ever was — a reliable measure of financial health.

Why Income Isn’t a Proxy for Wealth

Earning a high salary is often seen as the benchmark of success. But income is only part of the financial picture. It tells you how much someone receives, not how much they keep, what they own, or how secure they feel.

For example, someone earning £150,000 a year may still be renting, supporting children, paying for private childcare, and managing debt. If they’re also losing Child Benefit and paying the effective 60% marginal tax rate between £100,000 and £125,140, the take-home pay starts to shrink dramatically.

Meanwhile, someone earning £35,000 might live mortgage-free thanks to inheritance or early parental support. They may have fewer financial commitments, a lower tax burden, and a small but growing investment portfolio. Their net worth could be higher, and their financial stress lower.

In other words, wealth isn't what hits your bank account each month — it's what's left once your costs, debts, and obligations are factored in.

Family Wealth: The Hidden Force Behind Many Financial Journeys

Increasingly, financial outcomes are influenced not just by your salary, but by your starting point. Access to family wealth — whether through gifts, early help with home ownership, or full inheritance — can play a bigger role in shaping someone's future than their earnings alone.

This is particularly evident among younger generations. A 30-year-old with a £50,000 income but a gifted deposit and no rent payments may be in a better position to accumulate wealth than a peer earning twice as much but still renting in London. Parental help creates leverage: it allows people to start saving earlier, avoid debt, and take calculated risks.

While these advantages have always existed, the widening gap in property affordability and pension responsibility has made them more decisive than ever.

Frozen Thresholds and Tax Drag: Why It Feels Harder to Get Ahead

One of the key challenges in 2025 is that even as nominal salaries have risen, tax thresholds have not. The Personal Allowance (£12,570), the Higher Rate threshold (£50,270), and the Additional Rate threshold (£125,140) have all been frozen for multiple years.

This has led to “fiscal drag” — where more of your income is taxed at higher rates simply because thresholds haven’t kept up with inflation. For example:

• Someone whose income rises modestly each year could be pushed into the 40% tax band without any change in real purchasing power.
• Those earning between £100,000 and £125,140 face an effective 60% marginal tax rate due to the tapering of the Personal Allowance.

This hidden tax pressure significantly reduces the value of salary increases and can explain why even well-paid professionals feel they’re treading water.

Regional Differences in What “Wealth” Looks Like

Where you live also shapes how wealthy you feel. HSBC’s report found that Londoners typically define wealth as starting at £289,000 per year. In the North East, that figure drops to £80,000. This isn’t just about perception — it reflects the vastly different costs of living.

Housing, childcare, transport, and lifestyle expectations vary dramatically across regions. A six-figure income in Manchester might stretch far further than the same income in London, where property prices, school costs, and social expectations are significantly higher.

Is Wealth-Building Getting Harder?

By most measures, yes — particularly for younger adults. Here’s why:

• Home ownership now requires higher deposits and longer mortgage terms, even for dual-income households.
• Pensions are increasingly individualised, with less generous employer contributions and no guaranteed outcomes.
• Higher education debt means many graduates start working life in the red.
• Inflation and cost of living have eroded the value of savings and increased baseline living costs.

Even those who earn above average may struggle to build meaningful long-term assets without family help, careful financial planning, or a degree of luck.

High Incomes Still Matter — But They’re Not Everything

To be clear, earning a high salary still gives you more options. It increases your ability to save, invest, and absorb financial shocks. It can fund childcare, education, home ownership, and travel. But in 2025, it’s not the reliable gateway to wealth it once appeared to be.

Without a strategy — and ideally, a cushion of assets — income can be consumed as fast as it arrives. Lifestyle creep, social comparison, and higher fixed costs mean many high earners feel they’re always catching up, not pulling ahead.

Strategies for Building Wealth Despite the Headwinds

Some individuals are still managing to build meaningful wealth, even amid the pressures. Common approaches include:

• Maximising pension contributions (especially for higher earners who benefit from tax relief).
• Using ISAs (Individual Savings Accounts) for tax-efficient savings and investments.
• Avoiding lifestyle creep (aka lifestyle inflation) by capping fixed monthly costs, regardless of income rises.
• Focusing on net worth rather than salary alone — tracking assets, debts, and passive income sources.
• Long-term planning over short-term spending: setting clear financial goals, with or without family support.

Redefining What It Means to Be Wealthy

Ultimately, wealth in 2025 Britain is more about freedom and security than a particular salary. It’s the ability to make choices — whether that’s working less, supporting family, or facing retirement without worry.

High incomes still play a role, but so do assets, mindset, and luck. And in an era where so much feels uncertain, perhaps the real question isn’t “who’s wealthy?” — but “what does being wealthy mean to you?”