What is the average UK starting salary for graduates? This is a relatively simple question, but the answer is much more complicated - not least because it varies by region and industry
Graduate salary data is very difficult to track accurately and raises many questions, including:
- How many hours are graduates working a week?
- What currency are they being paid in?
- What other company benefits are they getting?
- Which exchange rate do you use?
- Which average do you use?
However, due to its importance in the decision making of employers, students and graduates, salary can still be a useful metric.
This article is regularly updated with the most recent data
What is the average graduate starting salary?
The Institute of Student Employers (ISE) reports the median average graduate starting salary in the UK as £30,921. But they look primarily at big businesses and graduate schemes, so this figure is likely to be too high.
HESA's Graduate Outcomes data reports £24,979 as the mean salary with outliers excluded. However, this is an optional category in the survey so may not tell the whole story.1
In reality, neither of these numbers is particularly helpful in setting graduate salaries or informing graduates of what they should expect to earn. The averages are too general and hide key influences such as industry and region.
How does salary vary by region?
Unsurprisingly, the Graduate Outcomes data shows that London is the region with the highest salaries. However, the gap between London and Wales (the region with the lowest starting salary) is £3,839 a year or roughly £74 a week. Is this really sufficient to account for the difference in cost of living?
,Significant study ,No significant study North East,25827,25696 North West,22888,23648 Yorkshire and The Humber,23770,23968 East Midlands,24565,24541 West Midlands,25435,25145 East of England,24928,25758 London,28658,27215 South East,25313,24953 South West,25575,25278 Wales,23209,23534 Scotland,24355,25266 Northern Ireland,22866,24201
Where is the most affordable graduate destination?
Having a high salary does not mean you're getting a lot for your money. Taking a lower salary elsewhere could lead to greater purchasing power.
To put salary data into context we can analyse which areas of the UK provide the greatest cost of living to salary ratio.
Looking at the most popular graduate locations, we can use house prices as a proxy for cost of living and get the following results:
| Liverpool | 5.17 |
|---|---|
| Lincolnshire | 5.37 |
| City of Derby | 6.02 |
| City of Nottingham | 6.47 |
| Leeds | 7.06 |
| Lancashire | 7.13 |
| Birmingham | 7.14 |
| City of Southampton | 7.51 |
| Manchester | 7.64 |
| City of Leicester | 8.28 |
| Cheshire East | 8.29 |
| Westminster | 20.37 |
|---|---|
| Camden | 19.13 |
| City of London | 16.49 |
| Southwark | 14.68 |
| Tower Hamlets | 13.03 |
| Brighton and Hove | 12.57 |
| Buckinghamshire | 12.33 |
| Hampshire | 12.28 |
| Oxfordshire | 11.54 |
| Bournemouth, Poole and Christchurch | 11.30 |
The average UK ratio of house price to salary is 9.1.
To put this into perspective, if you live in Westminster earning an average salary then in order to buy a house you will need to work more than three times as long as somebody living in Liverpool.
Which are the best-paying industries?
The ISE and Graduate Outcomes disagree about which industries pay the most and what they pay. Comparing them is not straightforward, though, as there are differences in how industries are grouped. Built environment, for example, does not have its own category in Graduate Outcomes. Despite this, we can still see overlap with financial services, engineering, IT, and energy appearing on both.
| Industry | Salary |
|---|---|
| Legal | £42,810 |
| Finance and professional services | £32,316 |
| Digital and IT | £32,441 |
| Health & Pharmaceuticals | £30,125 |
| Energy, engineering and industry | £28,667 |
| Retail and FMCG & Tourism | £26,333 |
| Built environment | £26,708 |
| Charity and public sector | £27,966 |
| Industry | Salary |
|---|---|
| Finance Associate Professionals | £32,965 |
| Medical Practitioners | £33,852 |
| Functional Managers and Directors | £29,457 |
| Senior Officers in Protective Services | £32,632 |
| Managers in Logistics, Warehousing and Transport | £30,474 |
| Business, Research and Administrative Professionals | £31,197 |
| Finance Professionals | £30,390 |
| Other Health Professionals | £32,472 |
| Legal Professionals | £26,920 |
| Information Technology Professionals | £30,747 |
| Regulatory Associate Professionals | £24,000 |
| Engineering Professionals | £28,520 |
A more detailed overview of average salaries for various occupations can be found by browsing job profiles on Prospects.
Over time we have seen wholescale changes in the labour market. For example, 40% of jobs today are in roles that did not exist 50 years ago. Yet, many of the industries on these lists are those that have been practised for centuries and have traditionally been well paid.
How much more do graduates earn than non-graduates?
Statistics from the Department of Education show that the median annual salary for graduates over their lifetime is £34,000. The corresponding figure for non-graduates is only £25,000.
If we assume that graduates enter work at 21 and non-graduates at 18, with both retiring when they turn 65, this amounts to a lifetime earnings gap of £321,000.
The same report also suggests that postgraduates earn on average £8,000 a year more than their undergraduate counterparts.
It is currently unclear how a COVID-19 recession will impact graduate salaries.
Notes
- This article uses the latest data from HESA and the ISE.
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