The average worker has earned £1 million by the time they reach 56 years, nine months and three weeks old, according to new research by a pension provider.
The research, by Prudential, is based on earnings made before tax starting from the working age of 18 until the retirement age of 65. Over this period, the average worker would have paid a massive £137,101 in income tax and a further £84,129 in national insurance.
The analysis of average incomes found that women find it harder than men to earn £1 million. On average, women will not earn £1 million until they reach the age of 72 years, four months and three weeks – a staggering 22 years after their male counterparts.
The research suggests that women typically earn less money than men, which is why saving earlier in life for longer could be vital.
“We might think that making a million is a pipedream, but it will become a reality for those who earn an average salary throughout their working lives, especially if they are men,” said Vince Smith-Hughes, retirement expert at Prudential.
“Looking at cumulative earnings in this light helps us to understand how much we could potentially save for our retirement.”
The research highlighted that just 37% of people who are expecting to retire this year have enough cash saved to live comfortably.
If someone was to contribute just £100 a month to their pension throughout a 40-year working life, they could have pocketed an additional tax relief of £12,000.
“Of course, ongoing financial pressures and priorities means that it is not always that easy, but it remains the case that the earlier you save and the more you save, the better retirement income you will have,” added Mr Smith-Hughe.
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