The average worker makes a million by age 56
The average worker in the UK will take until the age of 56 to earn £1 million, but this rises to 70 for women, while men can reach the money milestone by just 51 years of age.
The analysis, produced by Prudential, looked at the average income – as measured by the Office for National Statistics – of people who started work at 18 and continues to receive an average income throughout their working life.
If they work until the age of 65, they will earn a total of £1,208,500 before tax, rising to £1,318,000 at age 70, and £1,427,500 for those working until the age of 75.
But the research reveals that the average worker will have paid around £123,300 in tax and £93,200 in National Insurance by the time they earn their first million – a staggering £216,500.
Inequality in the workplace remains rife, with women having to wait 20 years longer than men to make a million, but Prudential says the gap is narrowing slightly. Women are reaching their first million nearly two years earlier now than in 2012 due to higher earnings.
Since 2012, the average income for women overall have increased slightly and the average income for men in their 30s and 40s has seen a slight decrease.
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 £1 million in a lifetime of work. For many people, this cumulative view of lifetime earnings will help open their eyes to the amounts they could be saving for retirement.
"Of course 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.
An individual paying £100 a month into a pension over a 40-year career could receive additional tax relief of £12,000, Russell added.
"Pensions are an extremely tax efficient way of saving and the planned reforms announced in the Budget should make retirement saving more attractive. The reforms increase the choices available to savers and retirees, making it even more important to discuss your options with a retirement specialist before making retirement income decisions."
A scheme originally established in 1944 to provide protection against sickness and unemployment as well as helping fund the National Health Service (NHS) and state benefits. NI contributions are compulsory and based on a person’s earnings above a certain threshold. There are several classes of NI, but which one an individual pays depends on whether they are employed, self-employed, unemployed or an employer. Payment of Class 1 contributions by employees gives them entitlement to the basic state pension, the additional state pension, jobseeker’s allowance, employment and support allowance, maternity allowance and bereavement benefits. From April 2016, to qualify for the full state pension, individuals will need 35 years’ of NI contributions.