Jordan Gibson, Lifestyle financial planner

It still blows my mind how many parents tell me they’re cautious about taking a promotion or pay rise once they’ve got young kids.

I spoke to someone this week who was offered a £4,000 pay rise.
She was buzzing because she worked so hard for this.

Turns out, that “pay rise” could leave her £7,320 worse off.

Here’s what kicks in the moment you tip over £100,000 income:

1) Lose 30 hours free childcare (£6,840/year)
2) Lose Tax-Free Childcare (£2,000/year)
3) That extra income gets hit at an effective 62% tax

So instead of being £4,000 better off, she ends up with roughly £1,520 after tax, and lose £8,840 in support.

Net result: –£7,320.

Earn more and progress, absolutely. Just do it in a way that lets you actually keep the reward

I had a parent ask me this week about a £6,000 bonus they might get later this year.

They were excited… until I showed them how it could actually cost them £8,840.

Here’s why:
They earn just under £100,000. If that bonus tips them over the £100k line, a chain reaction starts:

1) They lose 30 hours free childcare (£6,840 a year at £6/hr)

2) They lose Tax-Free Childcare (£2,000 top-up)

3) They get hit with the personal allowance taper, pushing their effective tax rate in that band to 62%

So that £6,000 “extra” could end up being the most expensive pay rise they’ve ever had.
To replace £8,840 net in this tax band, you’d need £23,000 extra gross income!

These numbers reflect this client’s situation, your own costs might be higher or lower depending on where you live, but the principle doesn’t change.

For parents, £100k isn’t just another income milestone, it’s where the rules change.

The goal isn’t simply to avoid it, but to plan carefully so you’re not caught out.

A couple in their 50s asked me:

“Should we just pay off the mortgage and be done with it?”

On the surface, it sounds simple. Less debt = less stress.

But scratch beneath the surface, and it gets more complicated.

We talked through it:

→ What’s really behind the question? Peace of mind? Cutting monthly costs before retirement? Or just wanting the debt gone?

→ The mortgage deal itself. A 3% fixed rate feels very different to a 6% variable. The numbers can change the whole answer.

→ The opportunity cost. Every pound tied up in the house is a pound that can’t be invested elsewhere. Could that money be working harder?

→ Retirement planning. Paying off the mortgage might feel great, but will it leave them short on pensions, ISAs, or the cash flow needed for their lifestyle?

→ Flexibility. Once you dump savings into bricks, it’s hard to pull them back out. And life has a way of throwing expensive surprises.

By the end, they realised it wasn’t a simple yes-or-no. It wasn’t even just about money.

It was about how much freedom they wanted, how much risk they could tolerate, and what kind of retirement felt right for them.

A couple earning £250K, with two kids, came to me recently.

They’d built up some spare cash and didn't know what they should do.

The problem wasn’t the amount of money. It was the uncertainty of what to do next.

Here’s how we broke it down together:

First, we talked about purpose. Was this money for family memories, school fees, or their long-term future?

Then we looked at timing. If the money’s needed in 2–3 years, that rules out certain investments straight away.

Next came safety nets. Before thinking about growth, we checked their emergency fund, protection, and pensions were in good shape.

Only then did we tackle risk. How comfortable were they with volatility when they’ve got two kids depending on them?

And finally, the trade-offs. Keeping it in cash meant losing to inflation. Investing meant tying it up. Spending it meant enjoying the benefits now.

By the end, the decision felt a lot less overwhelming for them

Because the smartest move with spare cash isn’t about squeezing every last percent of return.

It’s about knowing it’s working in a way that supports your family, not stresses it.

I met a couple recently who wanted to empty their pension to pay off the mortgage in one go. For them, it sounded simple:

✅ Use the 25% tax-free allowance
❌ Take the tax hit
🏠 Kill the mortgage
💰 Free up the monthly payments early

For me, not quite.

By cashing in the pension now, they’d save 29 months of mortgage payments (£46k) plus about £9k in interest.

Total saving: £55k.

Not bad. Except if they just carried on as normal, using their 25% tax-free allowance, their pension would grow to around £77k, and the mortgage would still be cleared.

So, the “clear it now” option actually leaves them about £20k worse off overall.

Here’s the question I left them with, and I'm curious to know your thoughts too:

❓ Would you rather have the debt off your shoulders sooner, or be financially stronger a little further down the line?

Would doubling your income from £20k to £40k change your life more than doubling it from £80k to £160k?

Research says yes…..

At lower levels, money covers essentials, food, shelter, healthcare, and eases financial stress, freeing up mental space for life.

At higher levels, more income often just buys shinier versions of the same stuff, bigger house, fancier car, pricier holidays.

Happiness? Not guaranteed.

Why? Real happiness isn’t just about income. It’s also shaped by:
1️⃣ The quality of your relationships
2️⃣ Your health (mental and physical)
3️⃣ A sense of purpose and fulfilment

Chasing more income can come at the cost of these things, longer hours, higher stress, lifestyle creep, while the emotional return keeps shrinking.

I’m not saying you should stop striving for higher income.

It’s about being smart with what you have and making choices that actually matter, so your money fuels the life you want, rather than just the life everyone else seems to chase.

Do you have enough in your pension? Let’s look at the numbers…

If you want a moderate lifestyle in retirement, think overseas holidays, meals out, and a few luxuries, it costs around £43,900 a year for a couple, according to the Pensions and Lifetime Savings Association (PLSA).

Here’s what that looks like in pension terms:
1️⃣ £250k pot → lasts about 9 years (if you’re lucky).
2️⃣ £450k pot → around 20 years, which is far more realistic given how long retirement can last.

The model behind this takes into account the state pension, tax, inflation, and investment growth. Nothing in this graph is guaranteed, this is a simple visual exercise, a way to see how different pot sizes stack up against lifestyle costs.

It’s not perfect science, but it is a wake-up call. Your pension isn’t just a number, it’s how many years of freedom and flexibility you can actually afford.

Recently I’ve heard a lot of people stressing about pensions because of the Autumn Budget rumours.

“Are they going to scrap the 25% tax-free lump sum?”

This is the exact same rumour back in the 2024 Budget. Loads of people rushed to pull money out of pensions because they thought the rules were about to change.

And what happened?

Nothing. The 25% tax-free lump sum stayed exactly the same (capped at £268,275 if you like the detail).

The worst financial move you can make is reacting to speculation.

When Budget leaks start flying around, they usually do more harm than good, raising nerves, shaking confidence, and leaving people making choices they wish they hadn’t

Jumping ship too early because of “what ifs” can end up costing you far more than the thing you were worried about in the first place.

So if the next round of Budget gossip has you reaching for the panic button, take a breath.