How much will I earn in finance?
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Starting salaries in finance depend on the organisation that hires you, the division in which you work, where you’re based and whether you go in as a school leaver or graduate. Remember that on top of salary, employers offer additional benefits and, sometimes, bonuses as well.
School leaver salaries
Most accountancy firms are tight-lipped when it comes to revealing their salaries for school leavers. Of the Big 4, PwC and KPMG simply state that their starting salary for school leavers with A levels or equivalent is ‘competitive’; Deloitte describes its salary as ‘generous’. EY is less opaque and states that it offers its school leavers on its business apprenticeship a salary of up to £21,500, so it is likely that the others will offer something similar.
In addition to your salary, the vast majority of accountancy employers pay for your exam fees and the training you need to achieve basic accountancy qualifications, and give you study leave. Then, if you’ve impressed your employer and stay on to become professionally qualified, they also pay for this training. In some firms, the route to gaining a higher professional qualification for a school leaver takes around five years, which means that school leavers become professionally qualified a year before their graduate colleagues; in others the route takes six years so they both become professionally qualified at the same time (a graduate will have three years of university, then embark on a three-year graduate programme). How much you earn as a qualified accountant therefore doesn’t tend to be affected by whether you start work after your A levels (or equivalent) or after university.
According to the latest biannual survey from the Association of Graduate Recruiters (AGR), £25,000 is the average starting salary offered by its accountancy and professional services firm members. Bear in mind that AGR members tend to pay salaries at the higher end of the scale. As with school leaver salaries, most accountancy firms describe their graduate starting salaries as ‘competitive’.
Most accountancy employers pay for your professional training and exam fees as you work towards a professional qualification (which takes about three years), and give you time off to study. Your salary will tend to increase as you move towards qualifying as you will be gaining valuable experience. Professional body CIMA reports, for example, that its part-qualified students in the UK are earning on average £33,638 in basic salary.
Salary after professional qualification
Expect a big increase in salary once you qualify. The ICAEW says that you can expect to be making £48,100 on qualification (with an average bonus of £1,800), while the average global salary of ICAEW chartered accountants is £110,800 (£90,200 + £20,600 bonus). Most professional qualifications in accountancy are recognised around the world.
School leaver salaries
Starting salaries for school leavers entering investment management on higher apprenticeship programmes can range from £13,000 to £18,000 depending on where in the UK you’re based. For example, Schroders in London has offered new starters £18,000; Close Brothers, whose schemes are dotted around the UK, has offered £16,000; and J.P. Morgan recruited new entrants to its Bournemouth office on £13,000.
Investment management school leaver programmes are designed to give you experience and qualifications that can lead to a full-time permanent role with the same employer or a similar organisation. Apprentices who join the front office (the division that deals directly with clients and makes investments) at M&G Investments, for example, have the opportunity to complete the CFA (chartered financial analyst) exam, which is equivalent to an MSc degree, and are able (and encouraged) to complete the Investment Management Certificate.
Salaries will increase with experience and qualifications, sometimes during the programme, but most definitely following it. Most investment management firms don’t explicitly state whether school leavers will go on to earn the same amount of money as graduates. However, M&G Investments did explain that its apprenticeship schemes are an alternative route into investment management, and once any employee is in the business, no matter their age or educational background, everyone has the same job opportunities and earning potential.
Many graduates start out on £31,000 to £35,000 a year. However, salaries can fall on either side of this figure, with some employers offering upwards of £25,000 and others offering £40,000+. The latest AGR Graduate Recruitment Survey of its members, which include the largest investment management firms, revealed that these expected to pay an average graduate starting salary of £43,000 in investment management in 2013 to 2014.
As your career progresses after the graduate programme, so does your salary. Between five and eight years in the industry can see you take home £55,000 to £90,000. When you reach senior positions, such as associate or management, you could be earning well over £100,000. These figures don’t include the hefty bonuses available, which can be up to 200% of your salary at management level.
School leaver salaries
Higher apprenticeship salaries in retail banking and corporate banking usually range from £13,000 to £18,000 depending on the employer, the nature of the programme and the location of the business. Barclays reportedly paid around £12,500 plus London weighting (up to £4,000 as of 2015) for its sponsored degree programme. (This is in addition to funding your degree.) Roles outside the capital tend to pay less, but the cost of living will also be lower.
Your salary will increase as your career progresses. If you commit to continued professional development, you could end up on par with or surpassing people who join the business through graduate schemes – both in terms of position and salary – when you complete your school leaver programme. John Moorewood, head of emerging talent (Europe) at HSBC, said: ‘If apprentices choose to continue their studies to a higher level, they can be at the same level as a graduate by the time they are 21 – but with experience, a track record and reputation within the bank.’
Graduate salaries in retail banking typically range from £20,000 to £25,000, but some banks do offer more. The latest AGR Graduate Recruitment Survey of its members, which include the largest retail banks, has revealed that they expected to pay an average graduate starting salary of £33,000 in retail banking in 2013 to 2014. Salaries increase with experience and length of service. After your graduate training you could be paid up to £40,000; senior managers can earn up to £60,000; and central management can receive in excess of £80,000.
Graduates starting out in corporate banking tend to get paid more than those in retail banking, usually starting out on around £32,500. Some employers pay more. Lloyds, for instance, offers a starting salary of £38,000 for roles in corporate banking. You’ll receive pay rises with promotions. Following your graduate training you can earn more than £45,000 and at managerial level your pay cheque can top £75,000.
Graduate jobs in investment banking tend to be the most lucrative of the three banking divisions, with average graduate salaries of £45,000. The latest AGR Graduate Recruitment Survey of its members, which include the largest investment banks, revealed that these expected to pay an average graduate starting salary of £43,500 in investment banking in 2013 to 2014. And some would say these figures are conservative. Pay rises are awarded during the three-year graduate programme and continue thereafter, with salaries potentially hitting £100,000+ after only six years with a business.
School leaver salaries
Salaries for higher apprenticeships in insurance typically start at £14,500 to £18,000, depending on the size of the firm. At Aviva, actuarial apprentices receive a higher starting salary (£18,800 plus a £500 welcome bonus) than apprentices in other areas of the business, such as underwriting. However, this will not necessary be the set-up at other companies that offer actuarial apprenticeships to school leavers. Some employers do give pay rises during the scheme.
If you opt for a school leaver route into insurance it is unlikely that your salary will lag behind those who decide to enter the industry after university. Professional qualifications are essential to progress in this area of work, and both school leavers and graduates have to take them in order to climb the career ladder and salary scale – you’ll just be doing yours earlier.
Graduates in their first jobs in insurance typically receive £27,000 to £29,000, but earnings can be on either side of these figures – in the regions of £23,000 to £27,000 or £29,000 to £37,000. The latest AGR Graduate Recruitment Survey of its members, which include the largest insurance employers, revealed that the expected average salary for graduates starting work with its members in insurance in 2013 to 2014 was £33,000. Jobs in the capital usually pay more, with graduates often earning £2,000 to £5,000 more than those in the rest of the country. Depending on the area of insurance you join, you could earn more than £40,000 after your training. With more experience and seniority your salary could reach and exceed £100,000.