You’ll earn a million by 56 - but the taxman will take 20%

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IT IS the sort of news which would have made the plight of the Trotter brothers seem much less far-fetched a fantasy.

Had Del Boy uttered those immortal words ‘this time next year, we’ll be millionaires’ to a middle-aged Rodney he might well have been right, according to new analysis.

Leading insurer Prudential has calculated that the average UK worker will have earned a total of £1 million by the time they are 56 and a half years old.

Perhaps less welcome news to emerge from the report, however, is that someone earning an average income throughout their working life will have paid £216,500 to the taxman by the time they have reached the million-pound milestone.

Stan Russell, retirement expert at Prudential, said: “Being a millionaire is a dream for most of us, but the reality is that the average UK employee will easily earn £1million in a lifetime of work.”

The report, which looked at salary data from the Office of National Statistics to draw its conclusions, has also shed new light on the scale of the gender pay gap.

It found that a man on an average income throughout his working life will typically have earned their first million by the age of 51, while a woman will have to wait until their 70th birthday.

Despite facing an extra wait of almost 20 years to have earned £1 million, the amount of time women need to wait has fallen by nearly two years since the analysis was last carried out in 2012.

Since 2012, the average incomes for women overall have increased slightly and the average income for men in their 30s and 40s has seen a slight fall, researchers said.

When a woman starts out on her career, between the aged of 18-21, her typical wage is £8,033, whereas a man earns around £10,826.

The gap widens further when men and women are in their 30s and are often starting a family.

A typical woman aged between the age of 30 to 39 earns £23,075, while a man of the same age pulls in an average wage of £34,500.

And by the time people are aged over 60, a woman will earn around £14,985 and a man’s salary will be around £27,775.

Mr Russell said the analysis had been produced in a bid to ‘open the public’s eyes’ to the amounts they could be saving for retirement.

It also found that if the average person works until the age of 65, the current retirement age for men, their career earnings before tax will be £1,208,500.

Mr Russell added: “Life tends to get in the way and it is not as simple as recommending that workers should set aside a fixed amount of their lifetime income. But it is definitely the case that the earlier you save and the more you save, the better the retirement income you can expect and the more tax relief you will receive.”