MPs face being caught in 100k tax trap as pay rise confirmed
MPs’ annual salaries will rise by 5% in the next financial year and to around £110,000 by the end of this Parliament, Westminster’s expenses watchdog has said.
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The Independent Parliamentary Standards Authority (Ipsa) said it had taken into account that MPs in Westminster were faced with more “abuse and intimidation” and rising constituency casework when considering the rise.
In the past financial year MPs were paid £93,904 which will rise to to £98,599 in 2026/2027 which includes a 3.5% increase for the cost of living and a further 1.5% “benchmarking adjustment”.
After conducting this work it concluded that MPs should receive around £110,000 by the end of the Parliament in 2029.
This would bring MPs into earning enough to make them fall into Britain's 100k tax trap. The £100k 'tax trap' is where earners on between £100,000 and £125,140 face an effective 60% marginal tax rate.
For every £2 earned over £100k, £1 of the personal allowance is lost, creating a "hidden" tax band on top of the 40% higher rate.
Earners on over £100k also lose access to tax-free childcare and free hours.
This is good news
— David Hearne, CFP™ (@dontdelay) March 2, 2026
The nearer MPs salaries get to £100,000 the sooner more might support scrapping the 60% ‘tax trap’
This is when you start to lose your personal allowance on incomes above £100,000 and pay an effective 60% Income tax until income reaches £125,140 https://t.co/94YIga62xi
Ipsa said it has been comparing the salaries of Westminster politicians against “pay against other responsible roles in the wider public sector and parliamentarians in similar democracies around the world”.
They will be given rises over the next three years to attain that benchmark.
Ipsa chairman Richard Lloyd said: “The role of an MP has evolved. They are dealing with higher levels of complex casework, and abuse and intimidation towards MPs and their staff has been growing.
“In reaching our decision for 2026-27 we have benchmarked MPs’ pay against other responsible, senior roles in civic society and similar worldwide democracies, as well as considering our own core principles and the wider economic context.
“In future years we will continue to consider prevailing economic and fiscal conditions when confirming annual pay decisions taking into account the experience of people outside of parliament.”
MPs do not determine their own salaries, which have been set by Ipsa since the watchdog was created in 2009 in the wake of the expenses scandal.