When will you reach your peak earning potential? Many people assume it will be towards the end of their careers, perhaps at some point in their 50s, giving them more time to plan their finances before they approach their retirement years.
However, figures from the Office for National Statistics1 show that in actual fact workers can expect to reach their peak earning powers between the ages of 40 and 49.
From then on, incomes start to fall. This can come as a wake-up call to those who have yet to make adequate provision for their financial future.
Family protection is paramount
Most people in their 40s have a lot of calls on their time and money. It can be hard to cope with all the financial pressures of raising a growing family, like mortgages and the cost of education. That’s why every family needs a back-up plan that includes an emergency cash fund, and adequate life insurance to cover the mortgage and protect their income.
When it comes to pension planning, it’s worth bearing in mind that pension contributions attract valuable tax relief, and due to the beneficial effect of compound interest and reinvestment of dividends, even small sums saved now can make a difference to the level of pension you will enjoy when you retire.
Working with your adviser you can make the most of your earnings, whatever your age, and ensure you have the right plans in place to protect your future.
Tax treatment varies according to individual circumstances and is subject to change.
1 Office for National Statistics, 2014