You’re past your financial best by 40

As the average Brit reaches 40 years of age they may like to think that, as the cliché goes, life begins. But financially it's not so, according to research by money website Fool.co.uk.

The roaring twenties

The study finds that the average wage of 16- to 20-year-olds climbs from £15,000 to £17,500 for people in their mid twenties. Earnings accelerate throughout their thirties, but flatten out at £35,000 for 16 years once they hit forty. And it gets progressively worse after that.

Women's earnings reach their potential earlier, but with a whimper rather than a bang. Earnings plateau in the mid thirties and never reach the peak of £45,000 scaled by their male contemporaries.

The withering in wages coincides with a life stage that is typically more dynamic, making income stagnation a double blow. Around this age, eight out of ten people (85%) own their own homes, of which three in ten (32%) are family dwellings. Six out of ten (65%) support dependents, including both parents and children.

The snoring forties

For the typical twenty- and thirty-something, this is a cautionary tale, given that these groups racked up a sixth of Britain's total consumer debt in recent times. However, credit that they cannot afford on their £25,000 salaries may be no more affordable ten years later, when the salary increases they hoped for fail to come about.

Additionally, countless new costs such as school fees and caring for ageing relatives are likely to arise when you hit 40. There may even be panicked contributions to a still-empty pension pot. But at 40, contributions of more than £2,000 a year will be necessary to support an average lifestyle at retirement.

David Kuo, Head of Personal Finance at Fool.co.uk, says: "We all like to think that milestone birthdays lead to exciting turning points in our lives. But it seems we shouldn't get too ecstatic about life beginning afresh and full of bounty when we hit 40.

"With average consumer debt of £21,450, and potential mortgage debt of much more, it seems those of us indelicately referred to as middle-aged should show some of the conservatism the term implies.

"No one should ever think they are over the hill at 40, but you will have a financial mountain to climb if you haven't saved enough when you were still young and upwardly mobile.

"Consequently, optimistic career climbers need to plan their finances earlier. Tightening purse strings is obvious - but remembering that salary-wise they may never loosen is imperative."