It’s definitely a man’s world when it comes to pocketing cash as women wait 20 years longer to earn their first £1 million, according to a new survey.
The average British worker earns a £1 million by the time they are 57 years old, says research by financial firm Prudential.
A £216,500 slice of that cash is lost in income tax and national insurance.
Average savings are £100 a month and retirement savers pick up £12,000 pension relief against their contributions.
The figures are based on Office of National Statistics figures on someone who gets a job at 18 years old and stays on track with average national earnings throughout their working life.
The gender earnings gap
For men, the magic million mark is passed at around 51 years old, while women need to work into their retirement to 71 years old to cash in.
However, that’s two years less than women had to wait in 2012 and the financial gap is slowly narrowing.
Since 2012, average wages for women have edged up a little, while those for men have dropped.
£12,000 pension relief for a basic rate tax payer equates to just £255 a year for someone working for 40 years and contributing £100 to retirement savings.
Prudential’s study revealed someone in work to 65 years old will hit career earnings before tax of £1,208,500. Staying in work until to 70 years old will add nearly £110,000 to the earnings pot, and if they continue to 75 years old, they will pocket £1,427,500.
Life’s not that simple
Stan Russell, retirement expert at Prudential, said: “Everyone dreams of becoming a millionaire and the research shows that anyone who stays in work will pass that milestone sooner or later.
“Seeing how much you can earn during your life is a real opener when you start to look at why you do not have enough pension savings and where all that cash has gone.”
Russell also pointed out that life’s not that simple and events happen along the way that mean spending rather than saving is a priority.
“Pension tax relief is one way of maximising savings, and starting early and putting money away regularly is better than waiting and then not having enough disposable cash to build a worthwhile pot,” he said.
For working couples, the million pound earnings double up and give them a better opportunity to save more and take twice the advantage of pension contribution relief.