Apprentices out-earn university graduates in numerous disciplines.
These days, the classic route of heading to university after school is no longer the only path to success.
New analysis from the Telegraph has revealed that apprenticeships could not only rival, but potentially surpass, university degrees in terms of financial benefits in the early years of a professional career.
Higher salaries for apprentices in certain fields
Apprentices in fields such as engineering, construction, and media are not just dodging student debt; they are also earning higher salaries within five years of qualification.
For instance, apprentices in engineering earn an average of £39,204, compared to £36,333 for university graduates in the same field.
The financial advantage extends across various sectors. Apprentices in building and construction take home about £2,266 more per year than their university-educated peers in architecture. Similarly, those in media and communication fields out-earn journalism graduates within five years of graduating by almost £4,500.
Student debt vs. higher earnings – who wins?
But it’s not all doom and gloom for university degrees, and it’s not all sunshine and rainbows for apprenticeships.
According to 2020/2021 tax year statistics from the Department for Education, the median income for a university graduate is £2,200 more than that of an apprenticeship graduate five years after qualifying. In some sectors, like healthcare and law, university graduates still pull in a higher income five years after qualifying.
However, university students who started their course after 1 August 2023 start repaying their student loan when their annual income surpasses £25,000. Apprentices, who earn while they learn and have no debt to repay, benefit from having more disposable income each month.
This can add up: university graduates will repay 9% of their income over the £25,000 milestone. That means a university graduate on the UK average income (£34,963) can expect to lose £684 out of their paycheque each year. That’s a new laptop, a sofa, or a European holiday.
Government support for apprenticeships is robust, covering full tuition costs and guaranteeing a minimum wage. As of last year, the minimum hourly rate for apprentices was raised from £5.28 to £6.40. Many apprenticeships offer higher wages than that.
Conversely, university students face annual tuition fees of £9,250. Further, many students take on additional debt of up to £13,348 per year through maintenance loans which cover the cost of living while they study. According to the latest figures, students leave with an average debt of £45,000. 64% of students believe they’ll never repay their loan in full according to student money site Save the Student.
Why bother with university at all, if that’s the case?
Yet, the argument isn’t solely about immediate financial gain. Critics caution that while apprenticeships offer excellent short-term returns, the long-term trajectory might differ. Degrees are designed to provide lifelong skills which may lead to higher earnings as graduates progress in their careers.
Moreover, availability and location of apprenticeships can be limiting. According to UCAS, despite high interest among young people, many find no available apprenticeship programmes nearby. This scarcity contributes to a highly competitive and sometimes awkward application process, unlike the streamlined university admissions system.
This kind of thing is important to take into consideration when young people are deciding on their future career paths. Whether choosing an apprenticeship or a university degree, it’s crucial to weigh not only the financial implications but also personal interests and long-term career goals.
