With UK graduates facing fierce competition for a limited number of high-skilled jobs, is the solution a postgraduate degree and how does this affect your financial planning?
‘Hellish job market’
Today’s graduates in the UK are facing what was described in January by The Telegraph newspaper as a ‘hellish job market’. It was reported that applicants have a 1 in 140 chance of landing the jobs that they apply for.
In addition, increasing numbers of graduates are working in occupations where graduate-level qualifications are not needed because the number of graduates in the labour market has outstripped the creation of high-skilled jobs.
Historically, individuals with a university degree could expect to earn more over their lifetime compared to those without a degree. This ‘graduate premium’ represents the financial benefit of higher education, often calculated as the difference in salaries between graduates and non-graduates.
While traditionally seen as a strong financial incentive to pursue higher education, the graduate premium has been called into question in recent years as tuition fees rise and job prospects fall.
Rise in demand for postgraduate degrees
Before you abandon all plans to put your children through university, figures still seem to suggest that a degree will improve job prospects.
According to the UK government’s graduate labour market statistics in 2022 both graduates and postgraduates continue to have higher employment rates than non-graduates. However, postgraduates are around 12% more likely to be in a professional role than first-degree graduates, with 78% of all working-age postgraduates from the year surveyed in high-skilled employment, compared with 66% of all working-age graduates.
That’s one reason why growing numbers of British graduates are opting to continue or return to their studies by taking a postgraduate degree.
In 2022-23, 37,000 more graduates took postgraduate degrees than in 2018-2019, even though the sums to do so can be eye-watering.
Having graduated from a first degree with average debt of £44,940, postgrads are looking at additional fees of anything upwards of £17,000 for a master’s, with some costing much more, especially for those not eligible for home fees.
- A Global Executive MBA from the University of Manchester costs £43,250
- A master’s in public policy from LSE costs £43,100
Education fee planning: The key to easing the financial burden of student debt
Easing the financial burden of the debt accrued from further education starts with careful planning. Even if you’re unable to fully fund both an undergraduate and postgraduate degree, any contribution you make toward your child’s education can help reduce their financial strain.
By setting aside savings early and investing in education-specific plans, you can lessen their reliance on student loans and provide them with greater financial freedom as they enter the workforce. Thoughtful planning today can pave the way for a more secure future for your child.
If you’d like to know more, why not arrange a chat with one of our knowledgeable financial planners who can guide you through the process of setting up an education fee fund to give your child the very best possible start in life?
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