Counting up the average accumulated earnings of UK workers, new figures reveal how long it takes us to earn £1 million.
New analysis of UK earnings by Prudential has shown that, on average, UK workers will earn £1 million in total by the time they are 56 and a half years old.
The figures also reveal how much we contribute in tax and National Insurance contributions during that period, and the difference in earning potential between men and women.
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Men and women
While the average age at which somebody's first million is earned is 56 and a half, there’s a significant difference between the age at which men and women will earn that figure.
[SPOTLIGHT]A man earning an average wage throughout his career will earn his first million before he is 51, while a women would actually have to keep working well beyond the State Pension age, until she is over 70. Since the last analysis in 2012, the age for women to earn £1 million has fallen by two years, but there’s still a big gap.
Average incomes for women have slightly increased overall since 2012, while income for men in their 30s and 40s has fallen a little.
Accumulated tax contributions
By the time you’ve earned your first million, you’ll have shelled out roughly £123,000 in tax, and a further £93,200 in National Insurance.
However, if you were to pay £100 a month into a pension over forty years, you could qualify for additional tax relief of £12,000. Stan Russell of Prudential said he hoped that these figures would "help open the eyes” of UK employees to the potential savings they could make by setting aside money for their retirement income.
Beyond the current State Pension age
If a person works up to the current State Pension age of 65, their average lifetime earnings would be £1,208,500. If they chose to keep working until 70, they would earn £1,318,000, and at 75 the figure would stand at £1,427,500.
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