Page navigation

Graduate salaries in the UK

October 2018

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, industry, and gender

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 £29,000. 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 £24,217 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 Northern Ireland (the region with the lowest starting salary) is £5,611 a year or roughly £108 a week. Is this really sufficient to account for the difference in cost of living?

RegionAverage starting salary
London£27,256
South East£24,254
Scotland£24,151
East of England£24,076
West Midlands£23,117
South West£23,095
East Midlands£22,828
North East£23,014
Yorkshire and The Humber£22,528
North West£22,537
Northern Ireland£21,645
Wales£22,270

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:

Most affordable
LocationRatio of average house price to average salary
Hull4.9
Sunderland5.2
Liverpool5.4
Stoke5.6
Derby5.9
Least affordable
LocationRatio of average house price to average salary
Oxford16.7
Cambridge15.8
Brighton13.7
Reading11.3
Bristol10.4

The average UK ratio of house price to salary is 9.8.

To put this into perspective, if you live in Oxford 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 Hull.

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.

ISE data
IndustryAverage graduate starting salary
Legal£40,000
Finance and professional services£30,125
Digital and IT£30,000
Energy, engineering and industry£27,500
Retail and FMCG£27,000
Built environment£26,900
Charity and public sector£25,000
Graduate Outcomes data
IndustryAverage graduate salary
Extraction of crude petroleum and natural gas£36,138
Mining of metal ores£34,333
Manufacture of coke and refined petroleum products£32,345
Manufacture of tobacco products£30,713
Financial service activities, except insurance and pension funding£30,175
Information service activities£29,726
Manufacture of motor vehicles, trailers and semi-trailers£29,527
Mining support service activities£29,381
Manufacture of other transport equipment£28,437
Civil engineering£28,021
Computer programming, consultancy and related activities£27,898
Veterinary activities£27,851

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.

Is there a gender pay gap?

Considering salary data in isolation is not sufficient to comment on why gender salary disparities occur. However, they certainly exist. According to Graduate Outcomes in 2017/18:

  • the average salary for females with a first degree working in the UK was £23,276.
  • the average salary for males with a first degree working in the UK was £25,561.

This amounts to a difference of £2,285 a year.

The average salary for females who undertook significant further study since graduation was £23,788 which is slightly higher than the figure for females who went straight into employment. However, it is still below the average salary for males who completed further study (£25,693).

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

  1. This article uses the latest data from HESA and the ISE.

Get insights in your inbox!

Related articles

Loading articles...

{{article.data.article_title.value.text}}
{{article.data.page_title.value.text}}

{{article.data.article_title.value.text}}

{{article.data.author.linkedDocumentContent.full_name.value.text}}

{{article.date}}

This article is tagged with:

Event: {{article.data.page_title.value.text}}

{{article.data.city.value}}

{{article.date}}

This event is tagged with:

Loading articles...