Are you prepared for your pay to peak at age 47?
My career began with an £8,000 salary. It was unusually low even for a journalism starter job; local newspapers paid badly and still do.
But the job led to financial journalism and then to a career in the investment and pensions industry.
Fortunately, I enjoyed a healthy earnings curve that leaves me in a better position today. But at 52, it may just be that I’m at or beyond my earnings peak. Looking at official data, I could assume that to be the case.
Understanding your lifetime salary ‘shape’ would be useful information – and especially when you might reach ‘peak pay’. It is a valuable piece of the puzzle when making financial decisions that will affect your future.
While no one can predict the peak pay moment with precision, we can make some assumptions and educated estimates by examining available data and identifying broader trends.
When will you hit peak pay? asks Andrew Oxlade. The answer could make a big difference to investing and saving
‘Peak pay’ age rises from 40 to 47
A good place to begin is with official figures. The Office for National Statistics (ONS) publishes the Annual Survey of Hours and Earnings (ASHE), which offers detailed insights into how pay evolves over time across different age groups, sectors, and professions.
The age of peak pay was 47 in 2023, with the median salary topping out at around £34,000 (based on a 35-hour week).
The hourly earnings peak now comes far later in life than before – it was at age 40 in 2018 and 38 in 2013, according to the ONS.
The broad shape of the data is what you might expect: young people earn the lowest amounts, with earnings building to a peak for those in their late 40s. Then earnings fall from around age 50 until retirement.
This insight comes with a pinch of salt – it doesn’t necessarily mean that individuals’ pay will decrease, the ONS has highlighted.
It says that higher earners may retire early, reducing the median wage of those remaining in employment, and that employees may changes roles and working hours.
That conjecture is more likely to apply to those over 55, the normal age of access to private pensions (rising to 57 in April 2028).
Analysis by the Institute for Fiscal Studies in 2023 suggested only a tiny percentage of people retired by 55, rising to a little over 15 per cent by age 60. The point I’m making is that the ‘peak pay’ data probably does ring true up to age 55.
The peak age for women arrives earlier, at 44, although it has risen from age 34 a decade earlier.
The reasons for the later pay peak for women versus men are complex. In part, it is because women on average work fewer days after raising a family and hourly rates of pay can suffer, according to the ONS.
Its data showed 86 per cent of men were in full-time jobs, compared with approximately 61 per cent of women.
Last year Fidelity’s annual Women and Money study reported that 29 per cent of women said taking time out to look after children had impacted their earning potential.
Other factors may also be at play: 10 per cent of women in their 40s and 16 per cent of women in their 50s reported that menopause symptoms had negatively impacted their earning potential, with many forced to take significant time off work.
At least the gender pay gap narrowed over this period, although it remained at 14 per cent in 2023 compared to 20 per cent in 2013.
How does ‘peak pay age’ vary by industry?
Data from job listings websites can help build the pay curve picture. Totaljobs, one such website, even has a peak earnings calculator that can toggle between industries.
It is based on 37,500 queries for its salary planner, which combines salary expectations and listed data, between 2018 and 2020. The numbers are dated but the patterns are important.
It put peak earnings age at 46, at £43,369, but with a gentler decline than the ONS figures. This may be closer to the reality some of us will experience.
This data also breaks down industries, showing some to have later peak pay ages – – government roles at 56, education at 58 and finance at 64. Health jobs, in contrast, peak at 46 and pay then falls rapidly.
What happens to earnings curves in the future is anyone’s guess. The impact of artificial intelligence on the employment market is certainly a talking point.
Once it might have been that the pay curve reflected skills increased by slow-learning humans over time. How might AI affect that?
The uncertainty makes it more important than ever to get ahead of the curve.
Why this matters to millennials and Gen X
The typical millennials – those born between the early 1980s and late 1990s – will today be entering their peak earning potential, the ONS data suggests.
If you were born in 1985 and celebrating your 40th birthday this year, then the years ahead are significant to your retirement planning.
A simple scenario can bring this to life. Let’s consider you have £100,000 in pension money accrued by age 40. If you save at a rate of £500 a month, made up of your own contributions and your employer’s, you could have £232,298 by age 50 and £439,608 by 60.
However, raise this monthly amount to £600 and those figures could be £247,418 by age 50 and £478,421 by 60.
It is easy to devise these scenarios, it is harder to prioritise and find the money to make them a reality. But if you are not prioritising saving in your 40s, then when?
If you really want to get ahead of the game, the impact of investing early in life can be dramatic. Invest £300 a month from age 25 and by 60 you could have £305,000.
Leave it 10 years and start at 35 and you might only have £166,000. All the calculations are based on an annual return of 6 per cent, reduced to 4.5 per cent after charges.
Again, the numbers are intentionally simplistic and don’t consider the likely reality of rising contributions.
They make a point: that the long-term effect of compounding – earning returns on returns – is remarkable. And if your pay does plateau in your 40s, you’ll have some degree of future proofing.
A ‘CHILL’ late career may boost your position
Earlier saving is a powerful mitigation against an early peak earning age. But it’s not the only tool – working longer can transform a lifetime financial plan.
It is not what we instinctively want to hear but let me make my pitch.
Instead of pursuing the ultra-frugal fast-track early retirement path advocated by the FIRE movement (‘Financial Independence, Retire Early’), I suggest working longer in a way that keeps you engaged, healthy and happy.
I set out this FIRE antidote last year and called it CHILL – the quest to find Career Happiness to Inspire Longer Lives.
CHILL suggests a balanced path: save sensibly, invest long term, and then keep working longer than you might have considered ideal – but in a career you love.
This is better if planned from an early age, of course. But you can redirect your career path at any age.
Build an accessible ‘optionality fund’ (probably an Isa) that can help fund a career break for retraining, for instance.
And don’t assume a lower paid job is a negative. If it lets you work for longer, it may end up being more financially beneficial.
Bear in mind that with longer lives, governments everywhere need to find ways to keep people in work to reduce welfare costs and improve productivity, so policy direction should be on your side.
And progressive companies are concerned about early leavers: 20 per cent of companies reported problems in retaining pre-retiree workers in our 2025 Fidelity Global Employer Survey, for example.
So don’t be depressed by the flattening of the pay curve that may begin in your late 40s. Those younger can get ahead of the trend, those older can adapt. It’s never too late to find your ideal job and stretch your career.
Working longer might be necessary to make your lifetime financial plan work – and that might not be such a bad thing.
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