“More money, more problems.” Biggie said it first.
But he wasn’t talking about medics… or was he?
If you grew up in the ’90s, you couldn’t escape that song. It blasted from barbershops, buses, weddings – everywhere. It’s been ringing in my head for another reason. In the last few days alone, three senior medics told me the same thing, and it ties directly into what I explore in the Moneywise Doctor book.
Each of them said: “I never thought earning more money would give me this many headaches.”
Back pay.
Extra locums.
Overtime.
A touch of private work.
Income crosses £100,000.
Then suddenly, boom! They fall over the cliff edge. The notorious 60% tax trap, where high earners lose part (or all) of their £12,570 personal allowance. That’s when Biggie’s line hits differently: more money really can create more problems… if you don’t understand the tax system.
Take Dr Ben, for example.
NHS salaried GP income: £96,000
Extra locum shifts to pay for a family holiday: £25,000
Total: £121,000
He thought he was levelling up financially. Instead, he triggered the £100,000 Adjusted Net Income threshold and lost most of his tax-free allowance. His effective tax rate on part of his income jumped to roughly 60%. Meaning he kept less than 40 pence of every extra pound he earned.
This wasn’t bad luck.
It wasn’t punishment.
It was simply the tax system doing what it does quietly in the background.
This is the High-Income Paradox I wrote about in Chapter 5 of The Moneywise Doctor:
The more you earn without a tax plan, the worse off you can become. No wonder so many high-earning medics feel blindsided.
Why High Earners Fall into the Trap
Medics reach high earnings through a series of incremental increases – banding changes, back-pay adjustments, locum shifts, weekend work, or a little private income sprinkled in. The problem is that these boosts often land suddenly, pushing income into thresholds with disproportionate tax consequences.
High-income medics rarely realise:
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Not all income is taxed the same way
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Some thresholds cause exponential losses
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You can earn “more” yet take home “less”
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And you won’t know it’s happening until the payslip arrives
It’s not incompetence. It’s a system nobody explains clearly.
For example, when medics invest, many don’t realise how returns relate to risk. This is why understanding concepts like risk-adjusted return becomes essential, especially as higher earners try to make smarter decisions with their surplus income.
The Sweet Spot: Earning Smart, Not Less
The goal isn’t to earn less.
The goal is to earn smart.
Your financial defence is surprisingly simple:
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Reduce your Adjusted Net Income below key thresholds
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Use pension contributions and Gift Aid effectively
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Consider whether a limited company makes sense for private work
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Plan for one-off payments like locums, back pay, or medicolegal income
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Identify your Maximum Tax-Efficient Take-Home Pay – your “Sweet Spot”
This Sweet Spot is powerful. It protects your income, preserves your time, and prevents you from scrambling for explanations when HMRC adjusts your tax code. For deeper examples of how medics use planning to avoid financial shocks, the piece on tax-efficient investing lessons from 150 medics adds a lot of insight.
The quickest way to find your own threshold is by using the NHS Salary Calculator. Thousands of doctors have used it to avoid the 60% tax trap without cutting their lifestyle or their ambitions.
Understanding the Behaviour Side of Money
Many medics unknowingly make risky decisions, even when they consider themselves cautious. This often happens when income increases suddenly. A helpful read on this is:
Are you a risky investor without realising?
Once income rises, spending often rises with it. Lifestyle inflation isn’t a failure. It’s human. But it becomes dangerous when paired with tax thresholds that quietly reduce take-home pay.
So while your income climbs, your bank balance may not.
Why Your Tax Strategy Matters More as Income Rises
When income crosses £100,000, everything becomes interconnected:
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Your personal allowance shrinks
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Your marginal tax rate explodes
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Child Benefit (if applicable) may be affected
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Payments on account increase
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Student loan deductions escalate
And if you are investing without planning, losses may hit harder. Yet, oddly enough, even losses can be useful with the proper strategy – something most medics aren’t taught. For example, many don’t realise they can use capital losses to reduce tax in future years.
Meanwhile, financial safety nets become more important as your responsibilities grow. This is where having a strong emergency fund becomes essential not optional.
The Real Message Behind All This
The message of the Moneywise Doctor isn’t “earn less” or “avoid ambition.”
It’s this:
Your income should work for you, not against you.
And the tax system won’t protect you. You must protect yourself.
High earners don’t stumble into trouble because they are careless. They stumble because the system is complex, unintuitive, and never explained in a way that respects the reality of a medical career.
But when you learn to read the warning signs, everything changes. You build a career where your effort matches your reward.
So let me end with a simple question:
Has there ever been a time when you earned more… but somehow ended up feeling poorer?
If the answer is yes, you are not alone. And you are exactly who The Moneywise Doctor was written for.
Many Doctors Invest With Confidence, But Without Clarity.
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