Will I be better off financially if I go to university or join a school leaver programme at 18?

Will I be better off financially if I go to university or join a school leaver programme at 18?
Doing a degree before starting work usually means taking on student debt. Is this cancelled out by higher earnings in the long term, or is a school leaver programme the better financial option?

Your salary and career prospects

It’s very hard to judge whether you would be better off financially if you go to university full time before starting work or if you join an employer at 18 or thereabouts on a higher apprenticeship or other school leaver programme. It will depend on the career you want to get into and the particular school leaver programme you are considering.

Will a school leaver programme get me as far as a graduate?

Some school leaver opportunities are designed to get participants to the same level in their careers as graduates who go to university full time before joining. This is often the case with employers who offer the chance to do a degree part-time while working. Examples in finance include Barclays’ higher apprenticeship in leadership and management and KPMG’s audit school and college leaver programme. Examples in IT include sponsored degree programmes at CGI and Capgemini.

However, not all programmes aimed at 18-year-old school leavers are designed to put you on a par with graduates. In these cases you might find that in the long term you earn less than those with a degree. For example, school leaver programmes in law aren’t currently designed to allow you to qualify as a solicitor or barrister, which are the highest level roles with salaries to match.

Long-term career and salary progression

Make sure your research includes finding out about the qualifications you need to progress long-term. For example, in engineering a few companies offer the chance to take a bachelors degree part time while working; however, if you eventually want to become a chartered engineer (the highest level) it’s easiest if you have a masters degree. Many engineering students who take a degree before starting work complete a four-year masters level course, giving them a simpler path to becoming chartered. (See our article on how to get into engineering if you want to know more.)

Would graduate earnings outweigh student debt?

If you go to university you are likely to leave with student debt, which will then accrue interest. The total amount you repay will vary depending on how quickly you pay it off (the more you earn the faster you will repay so the less interest will build up) and whether you have paid off all your debt by the point at which it is written off (30 years after you graduate in England and Wales, 35 years in Scotland and 25 years in Northern Ireland). For example, if you borrow £37,500 and take 29 years to repay then based on current interest rates you would end up repaying around £52,500 in total. See our advice on university fees and funding for more detail.

Would you have been better or worse off financially if you hadn’t taken on this debt to get a degree? If you’d managed to get a place on a school leaver programme that got you to the same earning level as graduates in the same length of time – and that was as good for your career in the long term – then you’d have been better off without it. However, if you ended up earning a little less than a graduate then you might not have been. If you divide £52,500 over a typical working life of 45 years, then you’d only need to earn £1,167 a year more as a graduate than a non-graduate to make your degree a good financial investment.

Graduate earnings depend on the career you choose

When thinking about future earnings, focus first on what career path you want to take rather than whether or not to go to university. Yes, there are some very well paid jobs for which you almost always need a degree, such as investment banking and being a City lawyer. However, if this isn’t what you want to do or you’re not realistically going to get the grades you need to get in, this is actually a bit irrelevant. If you go to university and then decide to try to break into a competitive industry with low entry-level pay (or long unpaid internships) then you’ll probably earn less than school friends who decided to take an apprenticeship in a better-paid industry, at least in the short term. This may well be the case if you want to work in fashion design, journalism, broadcasting, the theatre, the film industry, the charity sector or museums, among others.

Take salary statistics with a pinch of salt

It’s wise not to get too fixated on statistics relating to average salaries for all graduates or school leavers. Media reports about how much graduates earn often don’t give the full story about their figures (see our article on the top five myths about university, degrees and employment prospects). And salaries vary so much, particularly for graduates, that averages aren’t much help in predicting what you personally might earn.

Take a look instead at our 'How much will I earn?' articles, in the different career sectors, which will give you a feel for graduate and school leaver programme salaries in different industries.

When looking at figures showing how much school leavers and graduates earn at the same company remember that school leavers join at a younger age and will probably have had several pay rises by the time graduates of the same age join the company.

Not sure what career you want?

If you’re not sure yet what career you want, it’s difficult to judge whether a school leaver programme would be as beneficial as a degree for your career. However, if you’re still unsure about your career direction by the time you need to make applications for university or school leaver programmes (typically year 13 in England and Wales, unless you’re taking a gap year) then you may well decide to apply to university to keep your options open rather than trying to convince recruiters to hire you onto programmes you’re not sure you want to do.

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