Best apprentices earn £50,000 more than many graduates

The best apprentices – those with a level 5 qualification – will earn £50,000 more in their lifetime than someone with an undergraduate degree from a university outside of the Russell Group, taking home close to £1.5m over their career.

The new calculation by the Boston Consulting Group is revealed in Levels of Success: The Potential of UK Apprenticeships, a new report published today by the Sutton Trust that looks at the apprenticeship landscape in the UK. The calculation factors in the cost of going to university, including average student debt levels, compared with the ability of apprentices to earn while learning. Those going to Russell Group universities can expect lifetime earnings of almost £1.6m, according to the BCG calculation.

Although today’s report shows that the best apprenticeships offer similar financial security as an undergraduate degree, it warns that the sector needs serious change if apprenticeships are to fulfil their potential as a vehicle for social mobility.

In the current system, the majority of apprenticeships (60%) are set only at GCSE standard (level 2), too many of which offer little value beyond traditional work experience placements and only marginally better lifetime earnings than secondary school qualifications alone. The government plans to create 3 million apprenticeships by 2020, but over the last two years, there have only been an estimated 30,000 higher apprenticeships and the fear is that too many of the new apprenticeships will only be at level 2.

New ComRes polling in today’s report demonstrates how opinions of apprenticeships as ‘second-best’ to a university education appeared to be ingrained in UK culture. Four out of five (80 %) of the young people surveyed – who said they were more likely to go to university or higher education than start an apprenticeship – said they thought getting a degree would be better for their long term career prospects.

This perception extends to teachers and parents too: previous Sutton Trust polling found that 65% of secondary school teachers would rarely or never advise a student to take an apprenticeship if they had the grades for university, and according to the Commission on Apprenticeships barely a third of parents think that an apprenticeship would be the best option for their son or daughter.

Because apprenticeships are particularly popular with those from less advantaged backgrounds, the failure to provide higher standards affects this group more. To make sure that apprenticeships fulfil their potential as a social mobility vehicle, the Sutton Trust is recommending that:

• Government, employers and other providers work together to provide more apprenticeships at level 3 or above;
• Level 2 (intermediate) apprenticeships need to be improved so that level 3 (A-level standard) becomes the norm for young people and all those who start on level 2 have the chance to progress to level 3 within the same apprenticeship;
• The government’s Career and Enterprise Company should promote apprenticeships, as well as university degrees, in their work with schools on careers advice;
• The government should launch a much bigger apprenticeships awareness campaign to reach young people, parents and teachers;
• The government should reform the vocational qualification system and ensure that regulation of higher apprenticeships is fit for purpose.

With research from Oliver Wyman, the report also looks at a sample of those apprentices enrolled in some of the UK’s top apprenticeship schemes, a disproportionately high number seem to have attended schools with higher levels of progression to Russell Group universities and lower levels of students receiving free school meals.

Today’s report follows HEFCE analysis last week showing that one in five graduates were not in professional jobs three and a half years after graduation, and Sutton Trust research last December showing the different earnings by subject in different types of university.

Sir Peter Lampl, Chairman of the Sutton Trust and of the Education Endowment Foundation, said today:

“Today’s report shows that the best apprenticeships offer similar financial security as an undergraduate degree.  Although the Government’s target for apprenticeships to 2020 is three million, we’ve only had 30,000 higher apprenticeships in the last two years. We need more good apprenticeships to offer genuine alternatives to A-levels and degrees.  We also need to tackle the ingrained negative culture of apprenticeships that exists amongst teachers, parents and young people alike.”

Alice Roberts, 21, apprentice at Jaguar Land Rover, said:

“I think apprenticeships offer lots of advantages over the traditional degree route: you can earn while you learn, receive training tailored to the job you’ll have when you finish, and apply the skills and knowledge learnt at university to real life situations.”

For further information or to arrange an interview, please contact: Hilary Cornwell or Conor Ryan on 0207 802 1660.

NOTES TO EDITORS

1. The Sutton Trust is a foundation set up in 1997, dedicated to improving social mobility through education. It has published over 160 research studies and funded and evaluated programmes that have helped hundreds of thousands of young people of all ages, from early years through to access to the professions.
2. The Boston Consulting Group is a global management consulting firm and one of the world’s leading advisors on business strategy. The model constructed for this report has been designed to calculate the lifetime earnings resulting from different UK qualifications, looking at both academic and vocational programmes of study. The model’s calculations are based upon growth and student debt data, employment rate data and qualification pay uplift data. Please note that a discount rate has not been applied.
3. ComRes interviewed 1,017 young adults in the UK aged between 16-18 online, between 25^th May and 5^th June 2015. Data were weighted to be representative of all young people in the UK by age, gender and region. ComRes is a member of the British Polling Council and abides by its rules. Full data tables can be found at comres.co.uk.
4. Oliver Wyman undertook a research piece across May-June 2015, which looked at the apprenticeship landscape in the UK, including a survey (n=118) that focused on the experiences of current apprentices and their employers.