The number of UK taxpayers under 30 with an annual income over £1 million has increased from 770 in 2021/22 to a five-year high of 830 in 2022/23 (year end April 5) *, shows new research by Lubbock Fine.
The rise in younger £1million earners is partly being driven by increased earnings for sports and media stars such as footballers.
The average salary for a Premier League footballer has now reached £3.6m per year, more than twice the average salary for a player in the next highest paid league (Spain’s La Liga) at £1.7m per year**.
Lubbock Fine says that young high earners in sports and media should learn from the mistake of previous generations and make a more deliberate effort to save for their retirement. This is because the earnings potential of sports and media stars can suddenly fall of a cliff-edge. Footballers in particular can have a limited number of years in which they earn the vast majority of their lifetime income.
Russell Rich, Partner and Head of Sports and Entertainment at Lubbock Fine, says: “Football players and entertainers are likely to make up a very large percentage of these young high earners.”
“The relative short duration of their careers makes it all the more important for these professionals to establish a long-term financial plan early on. They may well be the first in their families to achieve this level of wealth. There are plenty of examples of these stars spending too much of their income and be left with too little in retirement.”
“Sports players in particular tend to only have a short window where they can expect their earnings to be so high. Once they retire – usually only in their 30s – most will have to deal with a precipitous drop in income. That’s why investing wisely at a younger age is vital.”
“For those enjoying high earning power at a young age, the temptation to excessively spend on rapidly depreciating assets like supercars may prove too great to resist. This will only leave them with much less to fall back on when it is time for them to retire”.
Lubbock Fine research also shows that the number of UK taxpayers under 30 declaring income over £150,000 has increased from 13,400 to 15,240 over the same period***, as young people in sectors like tech and financial services continue to grow their income.
Adds Russell Rich: “Whilst retirement may seem a long way off in your 20s, it is important for any young person on a high salary to take some straightforward steps to look after their finances and invest for the future. By putting aside as much as they possibly can now, they can avoid the stress of having to catch up on their retirement savings later down the line.”
Number of UK high earners under reaches highest level in five years
*Source: HMRC.
**Source: Off the Pitch – football business intelligence service
***Source: HMRC.
