How long does it take to earn £1 million?

Household money

Updated on 16 July 2014 | 2 Comments

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.

Take control of your pension with a SIPP

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.

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.

Take control of your pension with a SIPP

More from lovemoney.com

How to top up your State Pension

Government pushes for new collective pension plans

New State Pension top-up scheme explained

Workplace pensions: what it means for you

Comments

Be the first to comment

Do you want to comment on this article? You need to be signed in for this feature

Copyright © lovemoney.com All rights reserved.

 

loveMONEY.com Financial Services Limited is authorised and regulated by the Financial Conduct Authority (FCA) with Firm Reference Number (FRN): 479153.

loveMONEY.com is a company registered in England & Wales (Company Number: 7406028) with its registered address at First Floor Ridgeland House, 15 Carfax, Horsham, West Sussex, RH12 1DY, United Kingdom. loveMONEY.com Limited operates under the trading name of loveMONEY.com Financial Services Limited. We operate as a credit broker for consumer credit and do not lend directly. Our company maintains relationships with various affiliates and lenders, which we may promote within our editorial content in emails and on featured partner pages through affiliate links. Please note, that we may receive commission payments from some of the product and service providers featured on our website. In line with Consumer Duty regulations, we assess our partners to ensure they offer fair value, are transparent, and cater to the needs of all customers, including vulnerable groups. We continuously review our practices to ensure compliance with these standards. While we make every effort to ensure the accuracy and currency of our editorial content, users should independently verify information with their chosen product or service provider. This can be done by reviewing the product landing page information and the terms and conditions associated with the product. If you are uncertain whether a product is suitable, we strongly recommend seeking advice from a regulated independent financial advisor before applying for the products.