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The degrees that lead to the best-paid careers
With tuition fees alone costing £27,000 over the cost of many three-year degrees now, future students might be wondering if that cost will pay off in the long run? And which subjects lead to the highest-paid careers?
We've crunched the numbers to see.
Please note that all the comparisons we make in this article are between graduates and those who could have gone to university but didn't (i.e. they started work with two or more A-levels or equivalent qualifications).
Average graduate earnings
While graduates often start off earning a similar amount to non-graduates, this changes quickly over the years. Twenty-two-year-olds earn an average of £15,000 a year, regardless of whether or not they have a degree, according to the Higher Education Statistics Agency (HESA).
Meanwhile, 87.3% of young graduates are employed compared to only 62.1% of young non-graduates.
The jump comes later on in your career. The median nominal salary of working-age graduates is £31,500, while the median nominal salary of working-age non-graduates is £20,750. This is sometimes called the 'graduate premium'.
Average extra yearly earnings
For both men and women without a degree, earnings increased for each year of age, evening out at the age of 30 and peaking at £19,400 at 34 (according to figures from the HESA again).
For those with a degree, earnings also increased with age, but at a faster rate. It levels off a bit later at the age of 35, peaking at £34,500 at the age of 51.
A third of people now get degrees, compared with just 15% 20 years ago.
Subject matters
It's no surprise that there are wide variations in average earnings depending on the subject studied. On average, English graduates earn just £3,637 extra a year (compared to non-graduates) whilst Physics graduates earn a massive £9,514 extra.
Here’s a sample of some of the most popular subjects studied in the UK and the average 'graduate premium' you can expect to earn.
Subject studied | Average extra earnings per year (compared to non-graduates) |
Physics and Astronomy | £9,514 |
Economics | £8,803 |
Maths | £8,457 |
Teaching | £7,081 |
Chemistry | £6,715 |
Business and Management | £5,886 |
Russian and Eastern European languages | £5,540 |
Psychology | £4,768 |
Sports Science | £4,570 |
Art and Design | £4,053 |
Law | £3,860 |
English | £3,637 |
Source: HESA 2011-2012 (most recent figures)
Graduates will earn an average of £100,000 more over their lifetime than non-graduates, minus outgoings like student debt. So the less debt you have as a student, the more of that you'll be able to keep.
Law comes top for rate of return on your student costs
This is the most important section in the article, as it looks at the average annual rate of return (your salary) on what you spent studying and how long you spent studying.
So while medicine graduates earn more, a degree costs more and you lose out on income, because you're studying (and so not working) for longer.
When you factor all these things together, law is the better investment with an average rate of return of more than 17% per year.
The annual rate of return on your degree
Subject | Rate of return |
Law | 17.2% |
Management | 16.9% |
Engineering | 15.5% |
Chemistry | 15.0% |
Physics | 14.9% |
European languages | 14.0% |
Medicine (excluding dentistry) | 11.6% |
Chemical sciences | 10.2% |
Psychology | 10.1% |
Linguistics and English | 9.7% |
History | 8.8% |
Source: The Royal Society of Chemistry and Institute of Physics commissioned study by PricewaterhouseCoopers
The average rate of return for all degrees is 12.1% per year. This makes a degree the best possible long-term investment (on average) you can make, trouncing the stock market or property over the long term.
However, we should add that these figures are from 2005 and there hasn't been a similar study carried out since. So they are likely a touch out of date. Also the figures in the above table may come down now that the cost of university is going up.
The postgrad premium
Some – but far from all – employers offer a premium for those who go beyond a Bachelor's degree. If you're lucky enough to get work for an employer that pays such a premium, those with doctorates could earn an extra 15.4% from the start. Those with master's degrees could earn an extra 8.3%.
Earnings growth steady in early years
Regardless of which degree you take, earnings tend to grow at a fairly consistent rate in the first few years. However, they typically balloon in the mid-years in some careers, such as those requiring a Chemistry degree.
Averages can be misleading...
There is massive variation within each field, which explains why some people get irate at so-called 'average earnings'. One graduate working in the same field or even the same job as another can easily earn a third less than some colleagues.
Public sector benefits less visible
Most graduates in the public sector seeing earnings statistics over the years will probably conclude they are unrealistic, but in return for a lower income most get greater job security and pension benefits.
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