First Steps to Wealth Report - Earning Options for Britain's Youth

First Steps to Wealth

A study highlighting earning options for Britain’s youth.

Skandia has published a study into earning opportunities available to Britain’s young people which shows how decisions made at age 16 can impact on long-term wealth.
Called First Steps to Wealth, the study shows that getting a degree remains the best route to long-term financial gain. Those who graduate with a degree are likely to earn, on average, over 50% more over their working lifetime than people who leave school at 18 to start a job and more than twice as much as people who start work at age 16.
However, those who are able to secure a good apprenticeship can earn almost as much as graduates over their lifetime. View the report.

Key findings:
Graduates

• An average graduate should earn (at today’s prices) £1,611,551 over a working career of 45 years compared to £1,023,840 for an 18-year old entering the workforce (48 year career span) and £783,964 for a 16-year old (49.5 year career span).
• The spectrum range of student debt at graduation post-2012/13 enrolment is £33,975 up to £48,750.
• Despite this being a personal debt, unless a student starts earning £50,000 per year immediately upon graduation, it’s likely that a significant amount of this debt will be written off by the Government. The average first year salary for a graduate is £19,653.
• In 30 years’ time the UK Government is likely to have to write-off debt of between £30,649 and £64,935 for every full-time university student who graduates in 2015.

Apprenticeships

• The two most promising sectors for apprenticeships in terms of career span salaries are Construction (£1,503,726) and Health Care, Public Services and Care (£1,494,547).
• The apprenticeships offering the least income over a career are Retail and Commercial (£1,038,746), Engineering and Manufacturing (£1,194,448) and Arts, Media and Publishing (£1,196,147).

School leavers

• There is a noticeable difference between individuals who enter the workforce at age 18 (post A-levels) compared to at age 16 straight after GCSEs.
• Over the course of a lifetime of work (almost 50 years) the difference is around £239,876 more for those entering work at age 18.

Unemployment

• If an 18 year old were to remain on Job Seekers allowance for their whole ‘would-be’ working life with zero part-time work, they would receive a total of £166,876 at today’s payment levels – a mere 10.3% of what an average graduate can hope to earn during their working life.
• Those who supplement the Job Seekers allowance by working the minimum allowed part-time hours would earn around a quarter (25.6%) of a typical graduate’s income over the course of their working life.

Skandia commissioned CoreData Research UK to produce the study. CoreData used a range of primary and secondary data to drive a series of analyses charged with assessing the choices available to young Britons in 2011 and beyond.

Click on the image below to view some highlights from the report in an infographic. Alternatively download the infographic as a PDF.