- Workers see their salaries fall to their lowest level in their 50s
- Wages peak at £33,459 between the age of 40-49, according to Friends Life
- Fear of being made redundant is a huge concern for older workers, says Slater & Gordon
Workers reach the peak of their earning power in their 40s, new statistics showed today.
Most professionals should expect their pay peak between the ages of 40 and 49, according to earnings data from the Office for National Statistics, while salaries fall to their lowest level during their 50s.
Pension and retirement specialist Friends Life, which analysed the ONS data, said the majority of workers aged 40-49 will see their wage peak to an average of £33,459, only to fall to £33,059 after they hit 50. By 60, the average income will drop by an additional 6 per cent to £31,052.
Financial power: Professionals should expect their earnings peak between 40 and 49, before seeing them fall by £400 after they turn 50
‘Our analysis shows that most people will reach their earning peak earlier in their career than they may think,’ said Colin Williams, managing director of corporate benefits at Friends Life.
‘Then they will see a fall during their 50s, just at the point that spending increases and people will be relying on savings for retirement.
‘This highlights how important it is to take action when your saving potential is at its highest during the early part of your working life, particularly to avoid having to use pension savings to pay off any remaining debt.’
He added, however that ‘the good news is, the earlier you take action to prepare financially for the future, the more you will do to secure the lifestyle you aspire to during retirement’.
According to Friends Life, people can save the least amount of money during the pre-retirement decade, a period when salaries fall and household spending increases.
In particular, those belonging to the 50-64 group are left with just £231.53 a week once expenses like household bills, living costs and transport costs are taken into consideration.
Research also showed that more people are at risk of being in debt in their 50s, while 25 per cent of the respondents said they would consider taking half or more of their pension pot as a lump sum at retirement, and one in six said they planned to use the money to pay off debt.
Edward Cooper, head of employment at law firm Slater & Gordon, which has carried out research into age discrimination in the workplace, said a huge area of concern for older employees was the fear of being made redundant.
In a survey of 2,061 people aged over 40, the firm found that three quarters of people said they believed they would struggle to find a new job because of their age.
Of those that thought their age might lead to them losing their job, more than half said they worried it was because they were more expensive, with others anxious that their company valued youth over experience, the research said.
Mr Cooper said: ‘These figures from the ONS evidence what we see in practice; namely adverse assumptions about older workers not being as effective as younger workers.
‘In too many industries age discriminatory attitudes persist as our recent survey suggested.’