Graduate salaries in the UK

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?

Institute of Student Employers (ISE) research indicates that the average graduate salary in the UK sits at £33,229.1 However, with ISE research primarily focusing on large businesses and graduate schemes, this figure is significantly higher than the average graduate salary reported by the Higher Education Statistics Agency (HESA).

According to data from HESA’s most recent Graduate Outcomes survey of 2020/21 graduates, the average salary reported by first-degree graduates in full-time employment was £27,340 fifteen months after graduation.

While useful, it is likely that both of these figures are too general, with average salaries hiding key influences that factors like industry and region of employment can have on graduate earnings.

How does salary vary by region?

HESA Graduate Outcomes data reveals notable regional differences in reported salaries among 2020/21 graduates fifteen months after graduating. For instance, graduates who found employment in London reported higher salaries, on average, than those in any other region of the UK. The average annual salary for those working in London was £6,203 higher than those working in Wales (roughly £119 a week).

However, wide disparities between different local economies in the UK mean that costs of living vary significantly and this, in turn, means that salary and actual disposable incomes are not synonymous.2

,Significant study ,No significant study 
North East,25034,25750
North West,24762,25673
Yorkshire and The Humber,24448,25215
East Midlands,24617,25386
West Midlands,24877,25693
East of England,26216,26455
London,31423,31201
South East,26180,26835
South West,25722,26043
Wales,24758,24998
Scotland,25476,26943
Northern Ireland,23143,25335

Where is the most affordable graduate destination?

Having a higher salary does not always mean more purchasing power for graduates. To put salary data into context, we can use housing prices as a proxy for cost of living to analyse which regions of the UK have the greatest cost of living to salary ratio. Assuming that house prices reflect the cost of living in an area/region, a lower median house price to median salary ratio in an area should mean greater purchasing power for graduates working there when compared to graduates employed in an area on the opposite end of the spectrum.

To put this into perspective, a recent graduate earning an average salary in London may need to work three times as long as a graduate earning an average salary in the North East of England in order to buy a house.3,4

For more in depth analysis on the relationship between graduate salaries and the cost of living in UK cities, see Charlie Ball’s two part series.

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.

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 UK graduates was £38,500 in 2022, this was £11,500 more than working-age non-graduates (£27,000), and £6,500 less than postgraduates.5

Moreover, research from the Institute for Fiscal Studies on the impact of an undergraduate degree on lifetime earnings reveals that the discounted difference in lifetime earnings between graduates and non-graduates is £430k for men and £260k for women. However, once taxes and student loans are taken into account, the earnings premium declines to around £130k for men and £100k for women. This represents a gain in average net lifetime earnings of around 20% for both men and women.6

Also in this series:

• Graduate salaries in context: what do they really mean?
• These cities give graduates the best value for their salary
• How graduate salaries vary by degree subject

Notes

1. Student Recruitment Survey 2022, Institute of Student Employers, 2022.
2. Graduate salaries in context: what do they really mean?, Luminate, 2019.
3. House price to residence-based earnings ratio, Office for National Statistics, 2023.
4. For a more local view, see ONS data (Tabs 3c and 5c).
5. Graduate labour market statistics, Department for Education, 2022.
6. The impact of undergraduate degrees on lifetime earnings, Institute for Fiscal Studies, 2020.

Written by

Micha-Shannon Smith

Assistant information analyst

Prospects