The Wages War: Women Vs. Men

Saving and Making Money

12 June 2008 | 0 Comments

If you're about to turn 40, you may be in for a shock....

Every woman has at some point in her life browsed through one of those glossy magazines that, aside from proclaiming how to reduce the size of your pores in less than thirty minutes, have also been known to urge women to embrace their forties as the `prime of life.' "Forty is the new thirty!" they shout. "It's not so bad - you're the same age as Kylie Minogue!" "Turning 40 is the beginning of a new journey in life, full of excitement and new endeavors!" That last pearl of widsom was from a website called fabulously40.com. (No, I'm not making this up. Try the link, you'll see). For those of you who invest belief in such proclamations, the following information may perhaps give you an unwelcome dose of reality. Yes, you may be fabulous at forty. But according to Fool's latest research, your ability to fund this fabulousness will have unfortunately plateaued. That's right girls. You will have reached your prime -- and your salary will have reached its peak. The lowdown Fool's latest research into average earnings in the UK has shown that in financial terms at least, the glass ceiling has not yet been confined to the past. Although earnings for both men and women aged between 16 and 20 climb from £16,000 to £17,500, and evenly thereafter until the age of forty -- once that milestone arrives, women stay put on £35,000 while men climb to £45,000 between the ages of 41 and 45. Granted, our research shows those carrying a Y chromosome will usually peak by the age of 45 - but they do it with ten grand more than us ladies do. What's up? Reaching your financial peak at 40 could pose a problem in terms of the kind of life commitments you are likely to face at this age. By the age of forty, eight out of ten people own their own homes, of which three in ten are family dwellings. A further 65 per cent support dependents which include both parents and children. So, what's a girl to do? First things first: the best way to prepare for a dip (in real terms) in your future earnings is to start saving now. For example, a 25-year old who opened an IceSave Cash ISA saver -- which currently pays 6.10% interest -- and deposited the maximum £3,600 every year, would have £98,335 at their disposal by the time they turned forty (if the interest rate stayed constant). That's around £45,000 earned in interest. Not bad... Alternatively, you could consider investing in the stock market. Long-term, this typically offers the best returns. You can buy shares from as little as £1.50 a trade with The Motley Fool Share Dealing Service. Those golden years Saving for a pension can also ensure that you will be able to have a comfortable retirement, even if your earnings average out at a less than desirable level when you reach that milestone fourth decade. Again, it pays to get the ball rolling early. Fool's research noted that by the time you reach 40, annual contributions to a pension pot should be amounting to £2,000 if you want to achieve a comfortable £200,000 at age 65 - not exactly easy to manage if you are earning £35,000 per year, paying off a mortgage and supporting a family. Given that this amount also assumes someone has been investing for you since birth - if only to the tune of £189 per year by the time you turn 16 - the importance of getting on top of your financial planning as soon as you start earning becomes even more apparent. Perhaps it's punishment for getting to live longer than men - or perhaps it's just a case of an ever-present inequality that unfortunately exists between men and women in the workplace. Of course, it's worth bearing in mind that not every woman falls into the average earnings category - there are some professions that pay significantly more than this even during your twenties or thirties, let alone before you reach forty. But no matter what you expect your earnings to be, planning ahead for the prime of your life can't hurt. After all, if you do end up earning more than our research suggests you will, you'll simply be even better off. Either way, you can take comfort in the fact that even though you may not have enough testosterone to swing a nine iron, you can fund a comfortable lifestyle at 40 and beyond. More: Ten Top Trackers> Check out the great savings accounts available via Fool.co.uk

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